Question: Consider the following General Demand Function: Q D =60 - 2P + 0.01M + 7P R For this example, consumer income is $40,000 and the

Consider the following General Demand Function:

Q_D=60 - 2P + 0.01M + 7P_R

For this example, consumer income is $40,000 and the price of a related good is $20

Consider the following direct supply function:

Q_S=-600 + 10P

Based upon the information above, please do the following analysis for this particular business:

1)Compute the direct demand function based upon the general demand function above.

2)Construct a demand schedule and a supply schedule, and utilize the following potential prices: $150, $125, $100, $75, $50, and $25.Show your work.

3)Using math, what is the price equilibrium for this business?What is the equilibrium quantity?

4)Suppose that as the economy picks up, consumer income increases from $40,000 to $52,000 (all other variables remaining constant).What is the new price equilibrium and the new quantity demanded based upon this change?

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