Reference no: EM13106763
Q. Demand Analysis:
Qc=100,000 - 100 Pc + 2,000N + 50I + 30Pf - 1,000 Pg + 3A + 40,000P1
Where Qc= quantity demanded per year of Chevrolet automobiles
Pc= Price of Chev. automobiles in dollars
N= population of the USA in millions
I= per capita disposible income in dollars
Pf= price of Ford automobiles in dollars
Pg= real price of gasoline in cents per gallon
A= advertising expenditures by Chev. in dollars per year
P1= credit incentives to purchase Chevrolets, in percentage points below the rate of interest on borrowing in the absence of incentives
Assume that the average volume of the independent variables are N=225 million, I= $12,000, Pf= $10,000 Pg= 100 cents, A= $250,000 and P1= 0, incentives are phased out
a. Find out the equation of the new demand curve for Chevrolets?
b. If Pc= $10,000, find out the value of Qc
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