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Assume that the demand curve for a product is given by: Q(d/x) = 1200 - 3Px - 0

Economics

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Assume that the demand curve for a product is given by:

Q(d/x) = 1200 - 3Px - 0.1Pz

Where Pz = $300

(a) What is the own-price elasticity of demand when PX = $140? Use the point elasticity formula. Show all calculations.

(b) Is this a necessary or a luxury good? Explain.

(c) What will happen to the firm's revenue if it decided to charge a price below $140? Explain and show all calculations.

(d) What is the cross-price elasticity between Good X and Good Z when PX = $140 and PZ= $300? Are goods X and Z substitutes or complements?