Economics
posted by Michelle Lawson .
Annual demand and supply for the Entronics company is given by:
QD = 5,000 + 0.5 I + 0.2 A  100P, and QS = 5000 + 100P
where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure.
a. If A = $10,000 and I = $25,000, what is the demand curve?
b. Given the demand curve in part a., what is equilibrium price and quantity?
c. If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?
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