Annual demand and supply for the Entronics company is given by:
QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P
Where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure.
(A). If A = $10,000 and I = $25,000, what is the demand curve?
(B). Given the demand curve in part (A), what is equilibrium price and quantity?
(C). If consumer incomes increase to $30,000, what will be the new equilibrium price and quantity?