(Solved): Assume that you are the owner of a solar panel shop (Sunny Panels Pty Ltd). Owing to the ongoing p ...

Assume that you are the owner of a solar panel shop (Sunny Panels Pty Ltd). Owing to the ongoing power crisis in your area and sharp increases in electricity prices over the last few years, there is a growing demand for alternative electricity in the form of solar panels. You sell and install these panels. You are making use of an electrician (the other product) to activate these panels for your customers. You are operating in a perfectly competitive market. The demand curve for your panels (in rand terms) is as follows: Qd = 2 000 - 3P +0.08Y + 6P2 with P = price of the product Y = income of your customers per month Py = price of another product R P2 = 4 000 and Y = 40 000 The marginal cost curve of the production of your panels is: Qs = -5 200 + 7P Required: 2.2. Calculate the equilibrium price and quantity sold per month, as well as the elasticity of your demand. (8) 2.3. If you want to increase your revenue, would it be worthwhile to hold a sale and why? (2) 2.4. Assume that the price for the electrician increases to 5 000 and because of a tax reduction by the government the income of your consumers increases to 44 000. 2.4.1. Calculate the new equilibrium price and quantity. (2) 2.4.2. Calculate the cross-price elasticity and income elasticity of demand and explain their meaning (8)