3(a). Starting with the estimated demand function for Chevrolets given Problem 2, assume that the average value of the independent variables changes to n=225 million, i=$12,000, Pf= $10,000, Pg= 100 cents, A= $250,000, and if Pi= 0. Find the equation of the new demand curve for Chevrolets.
(b)* Revised 3(b): If Pc is $10,000, find the value of Qc.
Function from Problem 2 is:
Qc= 100,000-100Pc+ 2,000N + 50I + 30Pf - 1,000Pg +3A + 40,000Pi
Qc= quantity demanded per year of Chev. Autos.
Pc = price of Chev. autos, in dollars
N= population of the US, in millions
I = per capita disposable income, in dollars
Pf = price of Ford autos, in dollars
Pg = real price of gasoline, in cents per gallon
A = advertising expenditures by Chev. in dollars per year.
Pi = credit incentives to purchase chev. in percentage points below the rate of interest on borrowing in the absence of incentives.
Given the function Qc= 100,000-100Pc+ 2,000N + 50I + 30Pf - 1,000Pg +3A + ...