A firm's individual demand for good x satisfies, InQx 1 8.21nPx + (0.9)InPy+ (1.42)In M + (0.3)In Ax. - Qxis quantity of X, Px is the price of X, Py is the price of Y, a related good, A is advertising and M is income level. If the current advertising budget is A $1676. What should their advertising be to increase quantity demanded by 12%? $ A new ad campaign for Y has increased Py by 7% (% APY = 7%). By what percent will this change quantity demanded of X? (It could be positive or negative.) % A recession is expected to drive income down by 5% next year (%AM = -5%). By what percent will this change quantity demanded? (It could be positive or negative.) %

A firm's individual demand for good x satisfies, InQx 1 8.21nPx + (0.9)InPy+ (1.42)In M + (0.3)In Ax. - Qxis quantity of X, Px is the price of X, Py is the price of Y, a related good, A is advertising and M is income level. If the current advertising budget is A $1676. What should their advertising be to increase quantity demanded by 12%? $ A new ad campaign for Y has increased Py by 7% (% APY = 7%). By what percent will this change quantity demanded of X? (It could be positive or negative.) % A recession is expected to drive income down by 5% next year (%AM = -5%). By what percent will this change quantity demanded? (It could be positive or negative.) %

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.12P

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