# Question: Gurgling Springs Inc is a bottler of natural spring water

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:
Q = 250 - 100P + 0.0001Pop + 0.003I + 0.003A

Where Q is quantity in thousands of five-gallon containers, P is price (\$), Pop is population, I is disposable income per capita (\$), and A is advertising expenditures (\$).
A. Determine the demand curve faced by CPI in a typical market where P = \$4, Pop = 4,000,000 persons, I = \$50,000 and A = \$400,000. Show the demand curve with quantity expressed as a function of price, and price expressed as a function of quantity.
B. Calculate the quantity demanded at prices of \$5, \$4, and \$3.
C. Calculate the prices necessary to sell 1,250, 1,500, and 1,750 thousands of five gallon containers.

View Solution:

Sales0
Views137