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Consider the general demand function:
Qd = 8,000 - 16P + 0.75M +30Pr
A. Derive the equation for the demand function when M = $30,000 and Pr = $50.
B. Interpret the intercept and slope parameters of the demand function derived in part a.
C. Sketch a graph of the demand function in part a. Where does the demand function intersect the quantity-demanded axis? Where does it intersect the price axis?
D. Using the demand function from part a, calculate the quantity demanded when the price of the good is $1,000 and when the price is $1,500.
E. Derive the inverse of the demand function in part a. Using the inverse demand function, calculate the demand price for 24,000 units of the good.
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