Question: the loglog demand function for becklers frozen pizzas is lnqx...
The log-log demand function for Beckler's Frozen Pizzas is: lnQX = 4 – 0.70 lnPX - 0.50 lnPY + 1.5 lnS + 1.2lnA + 0.40 lnI
The number of pizzas sold per week (QX) depends on the price charged for a pizza (PX), the price charged for a cheese sticks (PY), the percentage of single-parent families (S), monthly advertising expenditures (A) in thousands, and average annual household income (I) in thousands. Answer the following questions by filling in the table below:
i. Interpret the own-price elasticity and indicate whether it is elastic.
ii. Determine the cross-price elasticity in the estimated equation and interpret it.
iii. What does the income elasticity say about Beckler’s Frozen pizza?