The Demand for Craftmatic Adjustable Beds Is Described by Q_c

question 23

Essay

The demand for Craftmatic Adjustable Beds is described by Q_c = P^-1.60_cI^-0.80P^1.20_mA^0.25, where Qc is the number of Craftmatic Adjustable Beds demanded, P_c is the price of a Craftmatic Adjustable Bed, I is per capita income, P_m is the price of a battery-powered massage pillow, and A is the advertising budget.
a. If the marginal cost of producing a Craftmatic Adjustable Bed is $200, what is the profit-maximizing price?
b. Per capita income in the United States is forecast to rise by 3% next year. How will this impact Craftmatic's sales?
c. The price of battery-powered massage pillows suddenly fell by 10%. How will this impace Craftmatic's sales?

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Definitions:

Mass Tourism

Large-scale tourism that involves a significant number of visitors to a particular destination, often leading to environmental and cultural impact.

Amsterdam Locals

Residents or native people of Amsterdam, the capital city of the Netherlands.

Reterritorialize

The process of reassigning or reestablishing boundaries, territories, or spaces, often in cultural or geopolitical contexts.

Imagined Community

A concept referring to a socially constructed community, envisioned by its members to share common interests, identities, or beliefs, even if they never meet face to face.