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Demand Curve Analysis

Demand Curve Analysis. Papa's Pizza, Ltd., provides delivery and carryout service to the city of South Bend, Indiana. An analysis of the daily demand for pizzas has revealed the following demand relation:

Q = 1,400 ï?­ 100P ï?­ 2PS + 0.01CSP + 750S

where Q is the quantity measured by the number of pizzas per day, P is the price ($), PS is a price index for soda pop (1992 = 100), CSP is the college student population and S, a binary or dummy variable, equals 1 on Friday, Saturday and Sunday, zero otherwise.

A. Determine the demand curve facing Papa's Pizza on Tuesdays if P = $10, PS = 125, and CSP = 35,000, and S = 0.
B. Calculate the quantity demanded and total revenues on Fridays if all price-related variables are as specified above.

Solution Preview

Demand Curve Analysis. Papa's Pizza, Ltd., provides delivery and carryout service to the city of South Bend, Indiana. An analysis of the daily demand for pizzas has revealed the following demand relation:

Q = 1,400 -¬ 100P - ...

Solution Summary

The solution is provided in the attached file. The demand curve facing Papa's pizza is determined.

$2.19