... A^0.25
where q_b is the quantity demanded for commodity b, I is the total income of the households in City X, P_j is the price of good j, and A is the advertising budget.
Compute the own price, cross price and income elasticity of demand.
Interpret the computed elasticities.
Determine whether the two commodities are complements or substitutes.
Is commodity b a normal or inferior good? Explain.
Suppose the price of good j increased by 20 percent, by what percentage will the quantity of commodity b change?