*Use this information to answer the questions that follow.

Market researchers at Chrysler estimated the demand for their new Chrysler Crossfire sports cars as follows:
QC = 1,050,000 - 95PC + 14.25M + 60PBMW + 25PP

Where QC is the quantity of Chrysler Crossfires sold annually, PC is the price of a Chrysler Crossfire, M is average household income, PBMW is the price of BMW's 330i sports sedan,and PP is the price of Porsche's Boxster S sports car. The marketing team at Chrysler planned to price the Crossfire at $32,000. They predicted that average household income would be $75,000 for buyers in the market for their sports sedan. The current prices for BMW's 330i and Porsche's Boxster S was $34,000 and $50,000, respectively.

a. What was the predicted yearly annual sales of the Chrysler Crossfire?

b. What was the income elasticity of demand for the Chrysler Crossfire? What does your computed income elasticity say about Crossfire? If average household income was predicted to fall the next year by 2.5 percent (other factors remaining the same), would sales rise or fall? By how much (express your answer in percentage terms)?

c. What was the price elasticity of demand for the Chrysler Crossfire:

d. What was the cross-price elasticity of demand for Chrysler Crossfires
(i). With respect to changes in the price of the BMW 330i?
(ii). With respect to changes in the price of the Porche's Boxster S?

e. In part d, which of the two cross-price elasticities is larger in absolute value? Why do you suppose one is larger than the other?

The market demand for cotton socks is given by:
Q=1,000+.5I-400P+200P'
where,
Q = Annual demand in number of pairs
I = Average income in dollars per year
P = Price of one pair of cotton socks
P' = Price of one pair of wool socks
Given that I = $20,000, P=$10, and P'=$5, determine:
A. The price elasticity, e(Q,P)
B

The accompanying table lists the cross-priceelasticities of demand for several goods, where the percent price change is
measured for the first good of the pair, and the percent quantity change is measured for the second good.
a. Explain the sign of each of the cross-priceelasticities. What does it imply about the relatio

Using the "arc formula" and the data from the table below, compute where possible the own- price and income elasticities of demand. (remember that these elasticities are computed holding all other variables constant).
Price quantity price of related goods income
$10 600 $20

Suppose the demand for beer is characterized by the following point elasticities:
own price elasticity = -2.5
cross-price elasticity with soda = +3
income elasticity = +2
Based on the given elasticities, answer the following. Explain your answers.
a. If a firm in the industry wishes to increase total sales revenue (ignori

Suppose that the demand for Dell laptop computers) can be characterized by the following point elasticities: (own) price elasticity = -1.9, cross-price elasticity with computer printers = -2, and income elasticity = +1.1. Based on these numbers answer the following questions. Explain your answers and show your work.
a.If t

Always round tire finds the following cross elasticities:
A. Demand for tires / price of batteries = .45
B. Demand for tires / price of brake jobs = -0.70
C. Demand for tires / pric of an oil change = 0.002
Discuss implications for pricing of batteries, brakes and oil changes on the sale of tires.
Any help in underst

The demand function for a cola-type soft drink in general is Q = 20 - 2P, where Q stands for quantity and P stands for price.
a. Calculate point elasticities at prices of 5 and 9. Is the demand curve elastic or inelastic at these points?
b. Calculate arc elasticity at the interval between P = 5 and P = 6.
c. At which price w

A book publisher has the following demand function for the firm's novels (Qx):
Qx = 12,000-5,000Px + 5I + 500Pc
where Px is the price charged for the firm's novels, I is income per Capita, and Pc is the price of books from competing publishers.
Assume that the initial values of Px, I, and Pc are $5, $10,000, and $6, respecti

The demand function for Good X is defined as Qx = 75 - 2Px - 1.5Py, where Py is the price of Good Y. Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a compl