Economics Homewrok Help?

Problem 1.





Air California, Inc. is a regional airline providing service between Los Angeles, CA and Las Vegas, NV. Monthly demand is





Q = 45,000 鈥?250 P 鈥?300 PC + 250 BAI + 10,000 S





Q is the number of passengers per month


P is the price of a one-way trip on Air California


PC is a price index for connecting flights (1982 = 100)


BAI is a business activity index (1982 = 100)


S is a binary variable. S = 1 in summer months and S = 0 in all other months.





a. Suppose that in January, 2010, PC = 150, BAI = 200, and S = 0. Find the demand curve for Air California and graph it.





b. Find the demand curve for July 2010, assuming that the values of P, PC, and BAI are the same as in part A. Graph the July demand curve on the same graph that you created in Part A.





Problem 2.





Demand for DVD rentals at a video store is described by the equation: Q = 4,000 鈥?500 P, where Q denotes the number of DVDs rented per week and P is the rental price in dollars.





a. Determine the point price elasticity of demand at P = $3.00.


b. What would be the new point price elasticity if price were raised to P = $4.50?


c. If the profit maximizing price is $4.50, what is the marginal cost of a rental?|||for ans 1 part a) put in all the values and u ll get ur ans and since values are same just that S is different graph will b almost same.





for 2nd problem just use a micro level book it'll help