A firm has estimated the following demand function for its product:
Q = 8 - 2P + 0.10I + A
Q is quantity demanded per month in thousands, P is product price, I is an index of consumer income, and A is advertising expenditures per month in thousands.
Assume P=$10, I=100, and A=20.
Based upon this information, find out values for:
a) quantity demanded, and price elasticity of demand
b) income elasticity of demand, and advertising elasticity
(Use the point formulas to complete the required elasticity calculations)