You are working trying to estimate the proper price to charge a market

You are working trying to estimate the proper price to charge a market for the firm that sells beer in Lancaster Pennsylvania. They estimated that the demand curve for the market is Quantity demanded=20-2P. The firm currently prices the good at 8 dollars. They want to move the price to 6 dollars in a attempt to increase profits.This question is worth 5 points (please show work for full credit)

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1) What is the elasticity for this move in price (Use the midpoint method for elasticity) make sure you show your work? (1.5)

2) Now you are contacted by a different branch of this company that is in a lower priced (Scranton P.A.) market with the same demand curve. They want to move the price from 2 to 5 dollars. What is the elasticity of this change (Use the midpoint method)?(1.5)

3) Now suppose you find out that there is a similar product that impacts the Quantity demanded for a product. The relationship is Qd=15+Pb. Now suppose the price (Pb) of the other good is 5 and goes to 6. What is the Cross-price elasticity of the good? what type of relationship is this (complement or substitute) (2)

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