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Unformatted text preview: Lecture 22 October 14, 2009 Reading: Baye p. 85-90. Problem #6 posted. Due Monday. REVIEW___________________________________________________: III. Quantitative Demand Analysis B. Other Demand Elasticities 3. Advertising Elasticity PREVIEW_______________________________________________ C Elasticities and Demand Functions 1. Elasticity Linear Demand Estimates . 2. Logarithmic demand . LECTURE_________________________________________________ C Elasticities and Demand Functions 1. Elasticity Linear Demand Estimates . Given a demand curve, you can calculate point price elasticity estimates and discuss the relationship between those elements of demand you can control, and those that you cannot. Example Suppose that the demand function for Sorby Flash drives is of the form Q x = 600 - 40P x + .2P y + 2I Where Q x = Hundreds of Sorby Flash drives sold in the U.S. per week, P x = the price of a Flash drive....
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This note was uploaded on 04/12/2010 for the course ECON 303 taught by Professor Shrestha during the Fall '08 term at VCU.
- Fall '08