Suppose that the demand for M&Ms; (the candy)

Suppose that the demand for M&Ms (the candy) has been estimated to be Q_m= 96 - P_m+ .6P_h- .43P_c+ .2I where Q_mis the number of bags of M&Ms purchased (in thousands), P_mis the price of M&Ms (in cents), P_his the price of a Hershey bar (in cents), P_cis the price of popcorn (in cents) and I is per capita income (measured in thousands). Assume further that the current values for these variables are Q_m= 27, P_m= P_h= 80, P_c= 100 and I = 30. Calculate the price elasticity of demand (E_p), the cross-price elasticity of demand with respect to P_hand P_cand the income elasticity of demand. Is demand elastic? Are M&Ms and Hersheys substitutes or complements? What about M&Ms and popcorn? Are M&Ms normal, inferior or a luxury good? Explain. What price of M&Ms would maximize the revenue generated by the sale of M&Ms? Explain.