Question

The ABC marketing consulting firm found that a particular brand of tablet PCs has the following demand curve for a certain region: Q = 1 0 , 0 0 0 ? 2 0 0 P + 0 . 0 3 P o p + 0 . 6 I + 0 . 2 A Q=10,000-200P+0.03Pop+0.6I+0.2A where Q is the quantity per month, P is price ($), Pop is population, I is disposable income per household (S), and A is advertising expenditure ($).

Determine the demand curve for the company in a market in which P = 300, Pop = 1,000,000, I = 30,000, and A = 15,000.

Calculate the quantity demanded at prices of $200, $175, $150, and $125.

Calculate the price necessary to sell 45,000 units.

Answer 1

Solution : we have ,

Q=10,000-200P+0.03Pop+0.6I+0.2A

Put all the given values in the given equation of demand above .

Q = 10000 - 200 * 300 +0.03 * 1000000 +0.6 *30000 +0.2 *15000

Q = 10000- 60000+30000+18000+3000

Q= 1000

AT P= 200

QD = 10000 - 200 * 200 +0.03 * 1000000 +0.6 *30000 +0.2 *15000

= 10000-40000+30000+18000+3000

= 21000

IF P =175

QD= 10000-200 *175 + 30000+18000+3000 = 26000

IF P=150

Qd = 10000 -150* 200 +30000+18000+3000 = 31000

IF P =125

QD = 10000- 125 * 200 + 30000+18000+3000 = 36000

3. Price required to sell 45000 units :

45000 = 10000- (200*P) + 30000+18000+3000

200P = 61000 - 45000

P =16000/200

p= 80.