2. First suppose the market demand for “cougar caps” is given by the equation: Q:a1+a2*P-a3*P2+a4*1 Where P is the price of cougar caps, l is income,…

  1. How do you derive price elasticity of demand from a demand function?
  2. Then how do you derive income elasticity from the same function?

2. First suppose the market demand for “cougar caps” is given by the equation:Q:a1+a2*P-a3*P2+a4*1 Where P is the price of cougar caps, l is income, Q is quantity of cougar caps and a1, a2,a3, a4 are positive constants. A. What is the price elasticity of demand?B. What conditions need to hold for this to be an elastic demand? An inelastic demand? C. What is the income elasticity?D. What conditions are needed for this to be a nonnal good ? Inferior?