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2. The demand equation for the Widget Company has been estimated to be: Q = 20,000 + 10 I - 50P + 20 PC where

2. The demand equation for the Widget Company has been estimated to be:

Q = 20,000 + 10 I - 50P + 20 PC

where Q = monthly number of widgets sold, I = average monthly income, P = price of widgets, and PC= 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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