E303lect21F09

E303lect21F09 - Lecture 21 October 12, 2009 Reading: Baye...

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Lecture 21 October 12, 2009 Reading: Baye p. 85-90. Return Exams Problem #6 posted. Due Monday. Comment: If I’m asking for volunteers in class to answer a question, my intention is to let everyone who is interested have a turn. If you’ve had a turn recently, wait just a second prior to raising your hand to give other’s a chance. REVIEW___________________________________________________: III. Quantitative Demand Analysis B. Other Demand Elasticities 1. Cross Price Elasticity a. Definition b. Interpretation c. Uses 2. Income Elasticity a. Definition b. Interpretation c. Uses PREVIEW_______________________________________________ 3. Advertising Elasticity LECTURE_________________________________________________ 3. Advertising Elasticity a. Definition. The percentage change in Quantity induced by a one percent change in advertising expenditures. η A = ( Q/ A)(A/Q) - Using the arc elasticity formula = [(Q 1 -Q 0 )/(A 1 -A 0 )][(A 1 +A 0 )/(Q 1 +Q 0 ) A point advertising elasticity parallels the statement of the other elasticities. b. Uses:
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E303lect21F09 - Lecture 21 October 12, 2009 Reading: Baye...

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