The demand for good X is estimated to be Qxd = 10, 000 ? 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the income elasticity of good X is:
A. 0.008.
B. 0.82.
C. 0.082.
D. 8.2.
Answer: B
Economics
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