Draw the stations demand curve after this advertising


Suppose a gas station at a busy intersection is surrounded by many competitors, all of which sell identical gas. Draw the demand curve the gas station faces, and draw its marginal and average cost curves. Explain the rule for maximizing profit in this situation. Now imagine that the gas station offers a new gasoline additive called zoomine, and begins an advertising campaign that says: "Get zoomine in your gasoline." No other station offers zoomine. Draw the station's demand curve after this advertising campaign. Explain the rule for maximizing profit in this situation, and illustrate it with an appropriate diagram.

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Econometrics: Draw the stations demand curve after this advertising
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