Border Snacks Inc. produces and sells picante sauce, nacho chips, and queso dip. The company's marketing department estimated a linear demand function for Border's picante sauce: where is the number of jars of picante sauce sold per month, is the price of picante sauce, is the price of a bag of nacho chips, is the price of a jar of queso dip, and M is consumer income. In the market served by Border Snacks, income is currently $16,000. The following regression results were obtained using 22 monthly observations:
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-At the prices set in part c above, the price elasticity of demand for picante sauce is calculated to be ____________________, and demand is ______________ at this point. Show your work below:

Question

Border Snacks Inc. produces and sells picante sauce, nacho chips, and queso dip. The company's marketing department estimated a linear demand function for Border's picante sauce:  where  is the number of jars of picante sauce sold per month,  is the price of picante sauce,  is the price of a bag of nacho chips,  is the price of a jar of queso dip, and M is consumer income. In the market served by Border Snacks, income is currently $16,000. The following regression results were obtained using 22 monthly observations:
‪ 
-At the prices set in part c above, the price elasticity of demand for picante sauce is calculated to be ____________________, and demand is ______________ at this point. Show your work below:

Quizplus · Accepted Answer

The Answer of Border Snacks Inc. produces and sells picante sauce, nacho chips, and queso dip. The company's marketing department estimated a linear demand function for Border's picante sauce:  where  is the number of jars of picante sauce sold per month,  is the price of picante sauce,  is the price of a bag of nacho chips,  is the price of a jar of queso dip, and M is consumer income. In the market served by Border Snacks, income is currently $16,000. The following regression results were obtained using 22 monthly observations:
‪ 
-At the prices set in part c above, the price elasticity of demand for picante sauce is calculated to be ____________________, and demand is ______________ at this point. Show your work below: