A persons demand for gizmos is given by the following equation:

q = 6 - 0.5p + 0.0002I

where, q is the quantity demanded at price p when the persons income is I. Assume initially that the persons income is $40,000. Show your work/ calculations. Points will not be given without showing how you get to your answers.

1. (3 points) At what price will demand fall to zero? (This is sometimes called the choke price because it is the price that chokes off demand.)
2. (3 points) If the market price for gizmos is $10, how many will be demanded?
3. (3 points) Interpret the intercept and the slope parameter on p of the given demand function.

d. (3 points) At a price of $10, what is the price elasticity of demand for gizmos?

e. (3 points) At a price of $10, what is the consumer surplus?

f. (4 points) If price rises to $12, how much consumer surplus is lost?

g. (5 points) If income were $60,000, what would be the consumer surplus loss from a price rise from $10 to $12?