Question

In: Economics

D1: Local pizza demand is described by this function: Qp = 126 - 36Pp + 6Pj...

D1: Local pizza demand is described by this function: Qp = 126 - 36Pp + 6Pj - 3GI, where Qp is the number of slices of pizza demanded, PP is price of pizza, PJ is price of peanut butter and jelly sandwiches, and GI is the population of gluten intolerant individuals.

Calculate and draw the inverse demand curve for pizza, assuming that Pj = $0.50 and GI = 1. Clearly mark the values of Pp and Qp where the curve reaches the Pp and Qp axes. Please draw, take a picture, and upload the file. If you prefer, instead you may write in the box below explicitly what the graph would look like, including which axis is where.

Solutions

Expert Solution

Qp = 126 - 36Pp + 6Pj - 3GI

Qp = 126 - 36Pp + 6*0.5 - 3*1 (Given Pj=0.5 and Gi=1)

Qp = 126 - 36Pp (The demand curve after substitution of values of Pj and GI)

Rahul Sunny answered 2 years ago
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