The Demand Equation for the Widget Company Has Been Estimated

question 57

Essay

The demand equation for the Widget Company has been estimated to be:
Q = 20,000 + 10 I - 50P + 20 P_C
where Q = monthly number of widgets sold,I = average monthly income,P = price of widgets,and P_C = average price of competing goods.
a.If next month's income is forecast to be 2,000,the price of competing goods is forecast to be $20,and the price of widgets will be set at $30,forecast sales.
b.What will sales be if the price is dropped to $20?

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Definitions:

Heat Cramps

Painful, brief muscle cramps that occur during exercise or work in a hot environment; muscles may spasm or jerk involuntarily.

Acute

Sharp, severe; having a rapid onset, severe symptoms, and a short course; not chronic.

Diaphoresis

Excessive sweating, often as a symptom of an underlying health condition or physical exertion.

Flushed

Sudden reddish coloration of the skin.