Quiz on PS-1-2010

Quiz on PS-1-2010 - 2 (a) Calculate the intercept and slope...

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ARE 100A Quiz on Problem Set I January 15 2010 Richard Howitt Name……………………………. . Section……………………………. . 1. Given the following supply and demand functions for advertising on “American Idol”: Demand Q = 54.93 0.041 P Supply Q = 6.75 + 0.025 P Q is measured in millions of audience, and P is measured in cost per 30 seconds($1000) (a) Calculate the market equilibrium price and quantity. Show your calculations (b) Calculate the Elasticity of demand at the equilibrium.
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Unformatted text preview: 2 (a) Calculate the intercept and slope coefficients of the INVERSE (Price dependent) demand function. Show your calculations. PLEASE TURN OVER>>>> (b) Yesterday, the acerbic Brit star of the show Simon Cowell announced that he is no longer going to be on the show. The Wall Street journal estimates that this will change the audience and reduce the demand price per 30 seconds advertising by 100 ($100,000) for the same audience number (Q) Calculate the new demand function, ( Q = f(P))...
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This note was uploaded on 10/25/2010 for the course ARE 100A taught by Professor Constantine during the Winter '08 term at UC Davis.

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Quiz on PS-1-2010 - 2 (a) Calculate the intercept and slope...

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