Your marketing research department decides to only use price (P) and income (INCOME) as right-hand side (RHS) variables and estimates that the log-linear demand function for your product using natural logs (ln) as follows:
InQD = 10.65 - 2.4InP + 0.05 lnINCOME
i. What is the price elasticity of demand for your product? Briefly explain or interpret what this elasticity means. (1 pt)
ii. What is the income elasticity of your product? Briefly explain or interpret what this elasticity means. (1 pt)
