Question: the demand for organic beef is given by the following...
The demand for organic beef is given by the following equation: Qd o = 35 − 2Po + Pc + 4I where Po is the price of organic beef, Pc is the price of conventional beef, and I is the average consumer income.
(a) Graph the inverse demand curve for organic beef when Pc=5 and I=5 What is the choke price?
(b) Using the demand function from (a), what is the quantity demanded of organic beef when Po=5 When P0=10.
(c) Suppose PC increases to 15, while I remains at 10. Calculate the quantity demanded of organic beef. Show the effects of this change on a graph and indicate the choke price.
(d) What happens to the demand for organic beef when the average consumer’s income increases?