Refer to the Following:
a Consulting Company Estimated Market Demand $$\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M$$

question 56

Multiple Choice

Refer to the following:
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
$$\mathrm { Q } _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M$$
$$Q _ { 5 } = 240,000 + 5,000 P - 2,000 P _ { I }$$
where P is price, M is income, and
$P _ { I }$ is the price of a key input. The forecasts for the next year are
$\hat { M }$ = $15,000 and
$\hat { P } _ { I }$ = $20. Average variable cost is estimated to be
$A V C = 14 - 0.008 Q + 0.000002 Q ^ { 2 }$
Total fixed cost will be $6,000 next year.
-Suppose that income next year is forecasted to be $10,000 instead. What is the revised price forecast for next year?

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