Question #2002911: Calculation of Elasticities


Question: The log-linear demand function for Beckler’s Frozen Pizzas is:

\[\ln {{Q}_{X}}=4-3.80\ln {{P}_{X}}+0.30\ln {{P}_{Y}}+0.15\ln S+\ln A+1.50\ln I\]

The number of pizzas sold per week (QX) depends on the price charged for a pizza (PX), the price charged for a competitor’s brand of pizza (PY), the percentage of single parent families (S), monthly advertising expenditures (A) in thousands, and average annual household income (I) in thousands.

Interpret the price elasticity, cross-price elasticity, family structure elasticity, advertising elasticity, and income elasticity of demand for pizzas.

Solution: The solution consists of 257 words (2 pages)
Deliverables: Word Document

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