) Annual demand and supply for the Entronics
company is given by:
QD = 5,000 +
0.5 I + 0.2 A - 100P,...

Question

) Annual demand and supply for the Entronics
company is given by:
QD = 5,000 +
0.5 I + 0.2 A - 100P, and QS = XXXXXXXXXX100P
where Q is the quantity per year, P is price,
I is income per household, and A is advertising expenditure.
a. If A = $15,000 and I = $45,000,
what is the demand curve?

b. Given the demand curve in
part a above. what is equilibrium price and quantity?

David · Accepted Answer

a) The equation for the demand curve is given by: 
QD = 5000 + 0.5I + 0.2A – 100P 
The equation for the supply curve is given by: 
QS = – 5000 + 100P 
Now it is said that the values of I and A are: 
I = 45000 and A= 15000 
Therefore the demand curve equation becomes: 
      QD = 5000 + 0.

) Annual demand and supply for the Entronics company is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = XXXXXXXXXX100P where Q is the quantity per year, P is price, I is income per household,...

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