Suppose the relationship between quantity demanded and price and income is estimated to be Q = 30P -2.5 I -0.

1. Suppose the relationship between quantity demanded and price and income is estimated to be

Q = 30P-2.5 I-0.8

a) What effect on quantity demanded (in percentage terms) will have a 5% change in price have?

b) What effect will a 10% price increase have on total revenue?

c) Is this a normal, inferior, or luxury good? Explain