impact on equilibrium price and quantity
Not what you're looking for?
Annual demand and supply for a company is given by
QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5,000 + 100P
Where Q is the quantity per yea, P is price, I is income per household, and A is advertising expenditure.
a. If A = $10,000 and I = $25,000, what is the demand curve?
b. Given the demand curve in part (a) what is the equilibrium price and quantity?
c. If consumer incomes increase to $30,000 what will be the impact on equilibrium price and quantity?
Purchase this Solution
Solution Summary
Determine impact on equilibrium price and quantity in this post.
Solution Preview
a. If A = $10,000 and I = $25,000, what is the demand curve?
substitute A and I into Qd:
Qd = 5,000 + 0.5 *25000 + 0.2 *10,000 - 100P
Qd= 19500-100P
b. Given the demand curve in ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.