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Can you please help me with this exercise? The marketing department of The Great Bombay Tea Company has estimated the weekly demand for its brand

Can you please help me with this exercise?

The marketing department of The Great Bombay Tea Company has estimated

the weekly demand for its brand of gourmet pizza as

Q = 500 100P + 50I + 20Py + 30A

where Q is the number of pizzas (000's), P is the market-determined price of

Bombay's pizza, I is weekly per capita income, Py is the price of the brand of

pizza sold by Universal Foods, Inc., and A is Bombay's weekly advertising

expenditures ($000's). The supply equation for Bombay's gourmet pizza is

Q = 1,800 + 450P

a. What is the relationship between Bombay's pizza and Universal's pizza?

b. Suppose that I = $200, Py = $20 and A = $100. What is the equilibrium

price and quantity of Bombay pizza?

c. Suppose that Bombay's chief economist predicts that the current economic

expansion will increase weekly per capita income to $255. What effect will

this have on the equilibrium price and quantity?

d. Based on your answer to part c, how would you characterize Bombay's

pizza?

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