# Describe The Effect On The Demand Curve

Exercise 1.5* 1. Describe the effect on the demand curve due to an increase in (a) the price of substitutable goods; (b) the price of complementary goods; (c) advertising expenditure. 2. If the line, P = -Q + 6, is sketched with P on the horizontal axis and Q on the verti- cal axis, find the gradient, m, and the vertical intercept, c. 3. If the demand function of a good is 2P + 3Qp = 60 where P and Qo denote price and quantity demanded, respectively, find the largest and smallest values of P for which this function is economically meaningful. 4. The demand and supply functions of a good are given by P = -52, + 80 P = 2Qs + 10 where P, Q, and Qs denote price, quantity demanded and quantity supplied, respectively. (1) Find the equilibrium price and quantity (a) graphically; (b) algebraically (2) If the government deducts, as tax, 15% of the market price of each good, determine the new equilibrium price and quantity.