Suppose you have the following hypothetical demand or sales function.
Qx = -4Px + 2Py + 0.20I + 0.04A
And
PX = $200, (price of good X)
PY = $230, (price of good Y)
I = $15,000 (disposable per capita income)
A =$120,000 (advertizing expenditures)
a. Write out a reduced demand function
b. Solve for and write out the demand curve equation
c. Give a narrative interpretation for the coefficient of I
d. How could we classify good X and good Y? Explain why.
e. Calculate expected sales.
f. Find the total revenue function
g. Find the marginal revenue function
h. What output level maximizes total revenue?