Calculation of Percentage Increase in Demand When Expenditures Changes

Question

Given the following demand function:
Q = 2.0 P^-1.33 Y^2.0 A^0.66

Where:

Q = quantity demanded (thousands of units)
P = price ($/unit)
Y = disposable income per capita ($ thousand)
A = advertising expenditures ($ thousand)

Determine the following when P = $2/unit, Y = $8 (i.e., $8000), and A = $25 (i.e., $25,000)

The percentage increase in demand if advertising expenditures are increased by 5 percent

Summary

This question belongs to micro economics and discusses about percentage increase in demand if expenditure percentage increases

Total Word Count 15