A company in Wayout, Minnesota has hired you to calculate a demand curve for its acrylic mittens. You estimate: Q = 15,000 - 200P + .25Pop - .3I + .05A where: P = price Pop = population I = income A = advertising budget When P is 125, Pop is 1,300,000, I is 28,000 and A is 25,000, what point are we at on the demand curve?
If everything stays the same, except price, which falls to 95, would you expect us to be to the right or the left of the point on the demand curve?
Would you expect demand for these mittens to go up or down, at every price point during an economic boom when unemployment was very low?