1) Gurgling Springs, Inc. is a bottler of natural spring water distributed throu
ID: 1134240 • Letter: 1
Question
1) Gurgling Springs, Inc. is a bottler of natural spring water distributed throughout the New England states. Five-gallon containers Operating experience during the past year suggests the following demand functionf of GSI spring water are regionally promoted and distributed through grocery chains. or its spring water Q-250-100P+ 0.0001Pop + 0.0031 +0.003A where Q is quantity in thousands of five-gallon containers, P is price ($), Pop is population, I is disposable income per capita (S), and A is advertising expenditures ($) A. Determine the demand curve faced by CPI in a typical market where P- $4, Pop- 4,000,000 persons, I- $50,000 and A $400,000. Show the demand curve with quantity expressed as a function of price, and price expressed as a function of quantity. Calculate the quantity demanded at prices of $5, $4, and $3. Calculate the prices necessary to sell 1,250, 1,500, and 1,750 thousands of five gallon B. C. containersExplanation / Answer
A) Q= 250 - 100P + 0.0001Pop + 0.003i + 0.003A
Q= 250 - 100P + (0.0001*4,000,000) + (0.003*50,000) + (0.003*400000)
Q= 250 - 100P + 400 + 150 + 1200
Q= 2000 - 100P
And P= 20 - 0.01Q
B) Q ( WHEN P =5) = 2000- 100*5
Q= 1500
Q(When P= 4) = 2000 -100*4
Q= 1600
Q (when p=3) = 1700
C) P( when Q= 1250) = 20- 0.01*1250
P= 20-12.5 = 7.5
P(when Q= 1500) = 20- 15
P= 5
P(When q= 1750) = 20-17.5
P= 2.5
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