Answer the following questions in detail showing all steps clearly with labels 1. Ruth is considering the purchase of a 10year lease that will allow her to operate a concession stand at a local airport. If the lease will cost $150,000 and the relevant discount rate is 15 percent, what is the minimum annual prot {to the nearest dollar) necessary to justify the purchase? 2. Assume that the demand is represented by the following equation: (20 = 100 + 0.01lncome 3P Also, assume that the supply is represented by the following equation: a, = P10 a) Assume that the consumer income is $3,000. Compute the market equilibrium price and quantity. b) Assume that the economy goes into a recession and the consumer's income declines to $2,000. What will the new equilibrium values be now? 3. Afirm's demand function is O = 15 P and its total cost function is dened as TC = 3 + Q + 0.25002. Use these two functions to form the n'n's prot function and then determine the level of output that yields the prot maximum. What is the level of prot at the optimum? Note: MC=1+0.5Q 4. A firm has estimated the following demand function for its product: Q=B2P+G.1OI+A where Q is the quantity demanded per month in thousands, P is product price, I i; an index of consumer income, and A is advertising expenditures per month in thousands. Assume that P = $10, l= 120, and A = 10. Use the point formulas to complete the elasticity calculations indicated below. a) Calculate the quantity demanded. b) Calculate the price elasticity of demand. ls demand elastic, inelastic, or unit elastic? c} Calculate the income elasticity of demand. Is the good normal or inferior? Is it a necessity or a luxury? c) Calculate the advertising elasticity of demand