General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, the following equations is being used :
Qdemand=6280P^-2.15A^1.05N^3.70
Where: Qdemand = quantity demanded in 10 oz. boxes,
P = price per box in dollars,
A = advertising expenditures on daytime television in dollars,
N = proportion of the population under 12 yrs old,
a. determine the point price elasticity of demand for Tweetie Sweeties,
b. determine the advertising elasticity of demand,
c. What interpretation would you give to the exponent of N,