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Exercise 2 Suppose you have the following hypothetical demand or sales function. Qx= -4Px+2Py+0.20I+0.
Exercise 2Suppose you have the following hypothetical demand or sales function. Qx= -4Px+2Py+0.20I+0.04Aand PX = $200, (price of good X)PY =$230, (price of good Y)I = $1,500 (disposable per capita income)A =$12,000 (advertizing expenditures)a. Write out a reduced demand functionb. Solve for and write out the demand curve equationc. Give a narrative interpretation for the coefficient of Id. How could we classify good X and good Y? Explain why.e. Calculate expected sales.Find the total revenue functionFind the marginal revenue functionWhat output level maximizes total revenue.Show more