Annual demand and supply for the Entronics company is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. If A = $10,000 and I = $25,000, what is the demand curve? Given the demand curve in part a., what is equilibrium price and quantity? If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?

The equilibrium is the point of stability, where all the economic variables are constant or in…

Answered: Annual demand and supply for the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Annual demand and supply for the Entronics company is given by:

Q_D = 5,000 + 0.5 I + 0.2 A - 100P, and Q_S = -5000 + 100P

where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure.

If A = $10,000 and I = $25,000, what is the demand curve?
Given the demand curve in part a., what is equilibrium price and quantity?
If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?

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