4. An economic consultant for X Corp. recently provided the firm's marketing manager with this estimate of the demand function for the firm's product: Q = 12,000 – 3P, + 4P,– 1M + 2A, %3D where Qxd represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for 200 per unit, good Y sells for 15 per unit, the company utilizes 2,000 units of advertising, and consumer income is 10,000. How much of good X do consumers purchase? Are goods X and Y substitutes or complements? Is good X a normal or an inferior good?

4. An economic consultant for X Corp. recently provided the firm's marketing manager with this estimate of the demand function for the firm's product: Q = 12,000 – 3P, + 4P,– 1M + 2A, %3D where Qxd represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for 200 per unit, good Y sells for 15 per unit, the company utilizes 2,000 units of advertising, and consumer income is 10,000. How much of good X do consumers purchase? Are goods X and Y substitutes or complements? Is good X a normal or an inferior good?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section6.1: Elasticity: Part 1

Problem 4ST

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