Initial values are: This function is: Qs=89830−40Ps+20PX+15PY+2I+.001A+10W 4.(a).. Calculate the point income elasticity of demand assuming I=$15000 and that Ps=$8500 (this should make Qs = 431,600 ) and that the other variables are as given at the top before #1. The formula is: EA=∂I∂QS⋅QSI
4.(b). Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in advertising expenditures? Explain why or why not. 5.(a). Weather forecasters point out that the number of favorable weather days is an important determinant of sailboat sales. Calculate the point elasticity of demand for Smooth Sailing boats assuming Ps =$9000 (thus Qs =101600 boats) and W=160. The other variables and their values are as given at the top before #1. The formula is: EA=∂W∂QS⋅QSW 5. Does this elasticity coefficient indicate that the demand for Smooth Sailing boats is relatively responsive to changes in income? Explain why or why not.