(a)Assume that amanager of a fast-food restaurant in Georgia, USA, and thecost and demand

functions, respectively, are C(Q) = 5 + Q + 2.3Q² and Q = 65 - 5P, where Q is the quantity produced or demanded (output) and P is the unit price. What is thefirm's short-run supply function or curve?

1. Suppose fast-food industry demand function is approximated as Q = Px^-8.8Py^1.85A^1.3M^1.5, where Q is the fast-food quantity demanded, Px is the unit price of fast-food, Py is the unit price of dine-in restaurant food, A is fast-food advertisement cost, and M is fast-food consumers' average income. Also, last year, thefirm spent $2.85 million on advertising (TV, newspapers, etc.) and thetotal sales were $18.75 million. Should theadvertising expenditures maintain, increase, or decrease? Show the steps and calculations to justify theposition. Explain.

1. Why is advertising important or not important to thefirm?