Explore BrainMass

# Calculating Quantity Demanded and Determining Demand Curve

Not what you're looking for? Search our solutions OR ask your own Custom question.

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Gurgling Springs, Inc., is a bottler of natural spring, Inc. is a bottler of natural springs water distributed throughout the New England states. Five-gallon containers of GSI spring water are regionally promoted and distributed through grocery chains. Operating experience during the past year suggests the following demand function for its spring water.

Q = 250 - 100P + 0.0001Pop + 0.0031 + 0.003A

Where Q is quantity in thousands of five-gallon containers, P is price (\$), Popis population, I is disposable income per capita (\$), and A is advertising expenditures (\$).

A. Determine the demand curve faced by CPI in a typical market where P=\$4, Pop=4,000,000 persons, I=\$50,000 and A=\$400,000. Show the demand curve with quantity expressed as a function of price, and price expressed as function of quantity.

B. Calculate the quantity demanded at prices of \$5, \$4 and \$3.
C. Calculate the prices necessary to sell 1,250, 1,500 and 1,750 thousands of five gallon containers.

© BrainMass Inc. brainmass.com March 4, 2021, 7:57 pm ad1c9bdddf
https://brainmass.com/economics/macroeconomics/calculating-quantity-demanded-and-determining-demand-curve-134168

#### Solution Preview

Q = 250 - 100P + 0.0001Pop + 0.003I + 0.003A

If you plug the known factors into the equation, you can find the quantity demanded in the typical market.

Q = 250 - 100(4) + 0.0001(4,000,000) + 0.003(50,000) + 0.003(400,000) = 1600

Q = 1600 thousand five-gallon containers.

To simplify this equation for varying price, we can simply combine all the factors except ...

#### Solution Summary

Quantity demanded is assessed and the calculation process is explained in an excel attachment with graphs.

\$2.49