# Elasticity because more people will begin to reuse

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elasticity because more people will begin to reuse the services 7. In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is −1.5 and the advertising elasticity of demand is +0.6, would you expect an increase or decrease in total revenues? The advertising elasticity of demand at 6.6% will cause an significant increase in advertising expenditures which will decrease the amount of revenue. Chapter 4: Problems 5, 6, and 7 5. General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, a whistle-shaped, sugar-coated breakfast cereal for children. The following (multiplicative exponential) demand function is being used:

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Myisha Coleman April 22, 2013 QD = 6,280P −2.15A1.05N3.70 where QD = quantity demanded, in 10 oz: boxes P = price per box, in dollars A = advertising expenditures on daytime television, in dollars N = proportion of the population under 12 years old Determine the point price elasticity of demand for Tweetie Sweeties.
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