1. The Alpine Bagel Co. is evaluating pricing for Bagels in it's outlet in the student commons.Their in-house consulting team estimated that the daily demand for Bagels in the area to be thefollowingQ = -20P + 10Ps - 20Pc +101Where P = the price of bagels, P, = the price of scones (each), P. = the price of coffee (per cup),and I = Income (average annual disposable income, for students in thousands of dollars) b. Suppose that the price of scones = $3, coffee costs $2.5 per cup, and average annual disposableincome for students is $15,000. Calculate the demand curve (NOTE- be certain to enterincome appropriately - how is income denominated?)Demand:

Answered: b. Suppose that the price of scones =…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. The Alpine Bagel Co. is evaluating pricing for Bagels in it's outlet in the student commons.
Their in-house consulting team estimated that the daily demand for Bagels in the area to be the
following
Q = -20P + 10Ps - 20Pc +101
Where P = the price of bagels, P, = the price of scones (each), P. = the price of coffee (per cup),
and I = Income (average annual disposable income, for students in thousands of dollars)

b. Suppose that the price of scones = $3, coffee costs $2.5 per cup, and average annual disposable
income for students is $15,000. Calculate the demand curve (NOTE- be certain to enter
income appropriately - how is income denominated?)
Demand:

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The mathematical relationship between the quantity demanded of a product or service that consumers are willing to buy and have the ability to pay for and factors that influence demand, such as price, price of related goods, income, and preferences is known as a demand function.

It is used by economists or economic agents to estimate consumer behavior and make informed decisions about pricing, production, and distribution.

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