The Juice Shop Sells Iced Soft Drinks

question 32

Essay

The Juice Shop sells iced soft drinks. Management has found that demand is estimated by the equation: Q = 1,000 - 240P + 80PC, where Q denotes the number of drinks sold per day, P is the drink's price, and PC is the price of drinks at a nearby café.
(a) How many drinks will be sold if P = $1.50 and P_C = $1.20?
(b) Write down the equation for the firm’s demand curve for P_C = $1.20.
(c) If the other café’s price increases to $1.50, what is the effect on Juice Shop’s demand curve?

---

Definitions:

Primary Neurotransmitter

A principal chemical substance released by neurons to transmit signals across synapses to other neurons or muscles.

Limbic System

A group of brain structures, including the amygdala, hippocampus, basal ganglia, and hypothalamus. Because these brain structures are associated more with emotion than with reasoning, the limbic system is often described as the “emotion brain” (in contrast to the cerebral cortex, which some have dubbed the “reasoning brain”).

Gray Matter

A major component of the central nervous system, consisting of neuronal cell bodies, dendrites, and unmyelinated axons, associated with processing and cognition.

Reward System

Areas of the limbic system associated with motivations to seek resources critical to individual and species survival, such as food, shelter, and sex.