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Demand Equation for Joe's Frozen Yoghurt

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The Market Demand for Joy's Frozen Yogurt is given as:

Qd=-100P+1.5Phd-5Psd+20A+15Pop

Where Qd= Annual demand for frozen yogurt

Phd= Price of hot dogs
Psd= Price of soft drinks
A= Advertising expenditures
Pop= Percentage of the population

If Phd = 100, Psd = 75, A = 20, Pop = 35

How do you come up with the demand equation? How do you find out what the optimum price and quantity is that will maximize the profit for Joy's yogurt?

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Solution Summary

The demand equation for Joe's Frozen Yoghurt are given. A complete, neat and step-by-step solution is provided.

Solution Preview

Qd = -100P + 1.5Phd - 5Psd + 20A + 15Pop

Plug in Phd = 100, Psd = 75, A = 20 and Pop = 35 into the above equation. ...

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