- 6 Exercise 5 6 The Economic Analysis Division Of Mapco Enterprises Has Estimated The Demand Function For Its Line Of We 1 (52.69 KiB) Viewed 11 times
6. Exercise 5.6 The economic analysis division of Mapco Enterprises has estimated the demand function for its line of weed trimmers as QD=18,000+0.4N-350PM+90PsQD=18,000+0.4N-350PM+90Ps where N is the number of new homes completed in the primary market area, PMPM is the price of the Mapco trimmer, and PsPs is the price of its competitor's Surefire trimmer. In 2017, 1,500 new homes are expected to be completed in the primary market area. Mapco plans to charge $65.00 for its trimmer. The Surefire trimmer is expected to sell for $65.00. Under these conditions, the sales forecast for 2017 is If its competitor cuts the price of the Surefire trimmer to $60.00, Mapco's sales will A 30% reduction in the number of new homes completed would Mapco's sales by by (Note: Ignore the impact of the price cut of the Surefire trimmer.) r