2. We have the following weekly data on quantity demanded and price of a given

product, and rain (which affects demand).

P denotes Price of the products (in $), Qd denotes the quantity demanded and R

represents rain (in inches).

Qd / P / R

2000 / 25 / 0.5

1800 / 25 / 1

1600 / 30 / 1

Write down the demand in the following form:

Qd = a - bR - cP

and solve for a, b and c (Assume that Qd is a function of rain and prices, but

absolutely nothing else).

2.1

a __________

b __________

c __________

2.2

Price __________

Quantity _________

2.3 Suppose the Government wants to use a price floor to prevent the quantity of this good to be below 400 units. What should be the price floor be?