Cascadia Industries estimates the demand for its product to be: Qx = 380 - 10Px -...

Cascadia Industries estimates the demand for its product to be:

Qx = 380 - 10Px - 2Py + 3Pz + .1M, where M is income and Py and Pz are the prices of related goods. Py = $15, Pz = $50, and M = $5,000

a. The demand function for Cascadia’s product can be written

Qx = _______________________. The inverse demand function can be written Px=_________________., and marginal revenue is MR = ________________.

b. Cascadia would maximize sales revenues at a price of $_______________, and a quantity of _________________.

Now assume Px = $75

c. The quantity demanded is Q = ____________________.

d. The price elasticity of demand is _______________.

e. The cross-price elasticity of demand between good X and Good Z is Good Z is a ___________ (substitute, complement).

Solutions

Expert Solution

Rahul Sunny answered 1 week ago

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