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    Demand schedule problem

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    Suppose a firm has the following demand equation:

    Q = 1,000 - 3,000P + 10A,

    where Q = quantity demanded

    P = product price (in dollars)

    A = advertising expenditures (in dollars)

    Assume for the questions below that P = $3 and A = $2,000

    Suppose the firm dropped the price to $2.50. Would this be beneficial? Explain. Illustrate your answer with the use of a demand schedule.

    Suppose the firm raised the price to $4.00 while increasing the advertising expenditures by $100. Would this be beneficial? Explain. Illustrate your answer with the demand schedule.

    © BrainMass Inc. brainmass.com October 9, 2019, 8:20 pm ad1c9bdddf
    https://brainmass.com/economics/microeconomics/demand-schedule-problem-147849

    Solution Summary

    This solution discusses demand schedule, specifically in regards to determine how changes in price and expenditure would be beneficial or not to the company.

    $2.19