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1. Daily demand for 1 TB USB flash drive is estimated to be as the following...

1. Daily demand for 1 TB USB flash drive is estimated to be as the following linear function:

Qxd = 200 — 4Px + 5PY + 0.2M + 3Ax. Based on this information answer following questions:

  1. Suppose good X (flash drive) sells at $225 per unit, related good Y sells at $288 per unit, average daily consumer income is $650 and the company utilizes 1 10 minutes of daily

TV advertising. What would be daily quantity demanded for the flash drives? (2 points)

  1. How would we fully interpret the coefficient next to Ax? (3 points)
  2. What would the own price elasticity of demand coefficient for flash drives be equal to?

How would we fully interpret this price elasticity of demand coefficient? (5 points)

  1. What would the cross-price elasticity of demand coefficient for flash drives be equal to?

How would we fully interpret this cross-price elasticity of demand coefficient? (5 points)

  1. What would the income elasticity of demand coefficient for flash drives be equal to?

How would we fully interpret this income elasticity of demand coefficient? (5 points)

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