# Answer on Economics of Enterprise Question for EZRA NDUBULA Gerishomu

Question #5228

Supply and demand

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Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found that the demand curve follows this pattern. Q=200-300P+120 I +65T-250Ac+400 Aj

Q= number of cups served

I= per capita income

T= average outdoor temperature

Ac= competition's monthly advertising expenditure

Aj=joy's own monthly advertising expenditures

P=1.50, I=10, T=60, Ac=15, Aj=10

a) Estimate the number of cups served per week and determine outlet demand curve

b) What would be the effect of a $5000 increase in the competitors' advertisement expenditure and outlet demand curve

c) What would joy's advertising expenditure have to be to counteract this effect?

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Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found that the demand curve follows this pattern. Q=200-300P+120 I +65T-250Ac+400 Aj

Q= number of cups served

I= per capita income

T= average outdoor temperature

Ac= competition's monthly advertising expenditure

Aj=joy's own monthly advertising expenditures

P=1.50, I=10, T=60, Ac=15, Aj=10

a) Estimate the number of cups served per week and determine outlet demand curve

b) What would be the effect of a $5000 increase in the competitors' advertisement expenditure and outlet demand curve

c) What would joy's advertising expenditure have to be to counteract this effect?

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## Comments

marz28.08.2015 14:30wonderful stuff

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