A company provides delivery and carryout service to the city
Question
A company provides delivery and carryout service to the city of South Bend, Indiana. An analysis of the daily demand for pizzas has revealed the following demand relation:
Q = 1,400 -100P – 2Ps + 0.01CSP + 750S
where Q is the quantity of pizzas per day, P is the price of pizza, Ps is a price index for sodas, CSP is the college student population and S, a binary or dummy variable that equals 1 on Friday, Saturday and Sunday, and zero otherwise.
a. Determine the demand curve facing Za’s on Tuesday if P = $10, Ps = 125, and CSP = 35,000, and S = 0.
b. Calculate the quantity demanded and total revenues on Fridays if all price-related variables are as specified above.
