The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are as follows: PX = 10, PY = 15, PZ = 50, M = 40, 000 a. Which goods are substitutes for X? Which are complements? b. Is X an inferior or a normal good? c. How much X will be purchased? d. Graph the demand curve for X given the above information. e. How will the demand curve change if M falls to 35, 000? Is that in line with b.?

The demand for your product X has been estimated to be QX = 7, 880 − 4PX − 2PY + PZ − 0.1M where Y and Z are other (related) products. The relevant price and income data are as follows: PX = 10, PY = 15, PZ = 50, M = 40, 000 a. Which goods are substitutes for X? Which are complements? b. Is X an inferior or a normal good? c. How much X will be purchased? d. Graph the demand curve for X given the above information. e. How will the demand curve change if M falls to 35, 000? Is that in line with b.?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter5: Price Elasticity Of Demand And Supply

Section5.3: Determinants Of Price Elasticity Of Demand

Problem 1YTE: According to the previous discussion, what factors influence the price elasticity of demand for...

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