The R J smith corporation is a publisher of romance novel. The corporation hires an economical to determine the demand for its product. After months of hard work the analyst informed that the demand for the firm's novel is given by the following equation: Q=12000-5000 Px+5I+500 Pc Where, P, is the price charged for the R J Smith novel. I is the income per capita. PC, is the price of books from competing publisher. Assume, that the initial values of Px, I and Pc are. $5, $10000 and $6 respectively. Using the information, the manager wanted to (i) determine what effect a price increased would have on total revenue. (ii) Evaluate how sale of the novels would change during a period of rising incomes. (iii) Assess the probable impact if competing publishers would raise their price .
The R J smith corporation is a publisher of romance novel. The corporation hires an economical to determine the demand for its product. After months of hard work the analyst informed that the demand for the firm's novel is given by the following equation: Q=12000-5000 Px+5I+500 Pc Where, P, is the
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