alt fn ctrl 5. (25 pts.) The estimated a monthly demand function for a certain product is as follows: Qd = a + bP + cM + dPR In the model, Qa is the number of units sold per month, P is the price you charge, M represents annual consumer income, PR is the price of a related good. Using two years of monthly information, the firm runs a regression which generates the following data: VARIABLE COEFFICIENT Intercept 9566.8 -48.5 M 0.024 PR 15.4 (a) (5 pts.) Next month, the firm expects average annual income to be $50,000, the price of the related good to be $100. According to the model, how many units will be sold next month if the firm's price is $120 per unit? Rd- 9566.8-48. SP-+0.0541- 15.4 PR Put P= 120, M: 50 00, PR= 150 2 d = 9566.8- 48. 5 (120) 40.071 (50 050) +15.4((00 ) - 9566.8 - 5820 + 1250 +/1540 - 6486.8 (b) (6 pts.) According to the model, calculate the change in the number of monthly units sold if: Scenario Change in units sold Annual income decreases by $1,000 - 4 Price increases by $7.50 0.16 X Price of the related good increases by $5 77 18/ $1= 15-4 - 48.1 X Page 8 of 10 15.4 X5 ( x / 7.51: 0,024 20.16(c) (7 pts.) Calculate price, income, and cross price elasticity of demand. Is the price chosen by the firm maximizing revenue? Is the related good a complement or a substitute of the product sold by the firm? Justify your answers. Dd: 9506. 8 - 48