The Following Demand Function Has Been Estimated for Fantasy Pinball $\quad P =$

question 6

Essay

The following demand function has been estimated for Fantasy pinball machines:
Q_D = 3,500 ? 40P + 17.5P_x + 670U + .0090A + 6,500N where $\quad P =$ monthly rental price of Fantasy pinball machines
$\mathrm { P } _ { \mathrm { X } } =$ monthly rental price of Old Chicago pinball machines (their largest competitor)
$\mathrm { U } =$ current unemployment rate in the 10 largest metropolitan areas
$\mathrm { A } =$ advertising expenditures for Fantasy pinball machines
$\mathrm { N } =$ fraction of the U.S. popul ation between ages 10 and 30 (a) What is the point price elasticity of demand for $F$ antasy pinball machines when $P = \$ 150$ , $\mathrm { P } _ { \mathrm { X } } = \$ 100 , \mathrm { U } = .12 , \mathrm {~A} = \$ 200,000$ and $\mathrm { N } = .35 ?$
(b) What is the point cross elasticity of demand with respect to Old Chicago pinball machines for the values of the independent variables given in part (a)?

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Definitions:

Aldehyde

An organic compound characterized by the presence of a carbonyl group (C=O) bonded to at least one hydrogen atom.

Organic Product

Materials or substances originating from biological sources, especially those made up of carbon-based compounds.

Major Organic

This term lacks specificity without additional context but could refer to the principal or most significant organic compound(s) or molecule(s) in a given context.

Methyl Ester

Organic compounds formed from the reaction of an acid with methanol, characterized by a methyl group attached to the ester functional group.