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Question: the demand for organic beef is given by the following...

Question details

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?

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