The log-linear demand function for Beckler's Frozen Pizzas is: ln {Q_X}=4-3.80ln {P_X}+0.30ln {P
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.
The president of Beckler's plans to increase the price of their pizzas by 25% and to increase advertising expenditures by 10%. By what percentage can the number of pizzas sold by Beckler's be expected to change? Will total revenue increase, decrease, or remain the same? Explain your answer.
Price: $2.99
Solution: The solution consists of 1 page
Deliverables: Word Document
Deliverables: Word Document
