Determine the demand curve facing GSI in a the market where P = $4; Pop = 4,000,

Question

Determine the demand curve facing GSI in a the market where P = $4; Pop = 4,000,000;

= $30,000 and A = $400,000 (i.e. show the demand curve equation with QDX = f (P))

Show the demand curve equation with P = f (QDX)

Calculate the prices to purchase the following QDX : 0; 50; 100; 150; 200; 250 and 300

Gurgling Springs, Inc. is a bottler of natural spring water distributed throughout the New England states. Five – gallon containers of GSI spring water are regionally promoted and distributed through grocery chains. Operating experience during the past year suggests the following demand function for its spring water:

QDX = 250 – 100P + .0001Pop + .005I + .003A

Where

QDX is the quantity in thousands of five – gallon containers

P is the price of a five – gallon container

Pop is the population

I is disposable income per household income dollars

A is adverting expenditures in dollars

Graph the demand schedule in EXCEL. Be sure to include a chart title, vertical axis label and horizontal access label

Explanation / Answer

QDX = 250 – 100P + .0001Pop + .005I + .003A

Putting Pop = 4000,000

I = 30,000

A = 4,00,000

QDX = 250 – 100P + .0001 (40000000) + .005(30000) + .003(4,00,000)

Qdx = 250-100P+400+150+1200

Qdx = 2000-100P

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