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A company producing elliptical's and treadmills has estimated the following demand curve for its product

Economics

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A company producing elliptical's and treadmills has estimated the following demand curve for its product.

Q =10, 200 -8P + 5A + 8I + 8PC - 4AC + 5PT where Q = Number of elliptical's demanded

P = $1,000; price of the elliptical

A = $200; advertising expenditures (thousands)

I = $50; GDP per capita (thousands)

P C = $1,200; competitor's price

A C = $300; competitor's advertising expenditures (thousands)

P T = $1200; price of a treadmill

a. Calculate the amount demanded for this product using the information given above.

Q= 10,200 - 8(1,000) + 5(200) + 8(50) +8(1200) - 4(300) + 5(1200)

Q=10,200 - 8000 + 1000 + 400 + 9600 - 1200 + 6000

Q=27200-9200

Q=18000 units

b. Plot the demand curve with P on the vertical axis(y) and Q on the horizontal axis(x).

Calculate the vertical and horizontal intercepts. Equation:

10200-8P + 15800

Q= 26000- 8P Intercepts: when

Q= 0,

P=3250;

P= 0,

Q= 26,000