Question: Starting with the estimated demand function for Chevrolets given in Problem 2, assume that the average value of the independent variables changes to N =225 million, I = $12,000, Pf =$10,000, Pg= 100 cents, A=$250,000, and Pi=- (i.e., the incentives are phased out).

Answers from The number of Chevrolets purchased per year (Qc) declines by 100 units for each $1 increase in the price of Chevrolets (Pc), increases by 2000 units for each 1 million increase in population (N), increases by 50 units for each $1 increase in per capita disposable income (f), and increase by 30 units for each dollar increase in the price of Fords (Pf). On the other hand, Qc declines by 1,000 for each 1 cent increase in the price of gasoline (Pg), increases by 3 units for each $1 increase in advertising expenditures on Chevrolets (A), and increases by 40,000 units for each 1 percentage point reduction in the rate of interest charged to borrow to purchase Chevrolets (Pi).

The value of Qc is $900,000.

(a) Find the equation of the new demand curve for Chevrolets

(b) If Pc is $10,000, find the value of Qc