Question #81444

1.Administrators are contemplating selling coﬀee at the George two days out of the week. It is estimated that weekly demand follows Q = 200−50P +30PC where Q is the number of cups of coﬀee sold each week, P is the price of the coﬀee, and PC is the price of coﬀee at the Starbucks down the street. a) How many cups will be sold if P = $1.50 and PC = $2? b) Write down the equation for the George’s demand demand curve for PC = $2. c) If Starbucks increases the price of their coﬀee to $3, what is the eﬀect on the George’s demand curve? (hint: how far will it shift?) d) Dean Djerdjouri has asked ECON 326 to help estimate a demand curve for coﬀee being sold at the George. The ﬁrst step in this analysis is to use economic theory and your intuition on what the most important factors we should take into account when estimating demand. Other than the variables already included, list two other factors that we should include in our analysis and explain the eﬀect you would expect these factors to have on demand.

Expert's answer

Learn more about our help with Assignments: Microeconomics

## Comments

## Leave a comment