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The following demand function for KMC product was estimated Qda=-1.5Pa+3.0Pb+1.8Y+0.04A+40C Where Qda is annual demand for KMC Products Pa is average annual price for KMC

The following demand function for KMC product was estimated

Qda=-1.5Pa+3.0Pb+1.8Y+0.04A+40C

Where Qda is annual demand for KMC Products

Pa is average annual price for KMC product

Pb is average annual price for a competing firm's product

Y is income per capita

C is index for credit availability

A is annual advertising expenditure

Assume that Pa=Kes.2, 666,000; Pb=Kes.2, 100,000

Y=Kes. 40,000; C=1.0; A=Kes 3,500,000 At the current price level, what effect would an increase in price of the firm's

products have total revenue? Support your answer. (3 marks)

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