A demand function of a certain good is given by Q 20 P 0 04 Y 4 T 3 Pr where Q and P denote the quantity and price of the good, Y is income, T is taste and Pr is the price of a related good (a)Calculate Q when P 8, Y 1000, T 15and Pr 30 (b) Is the related good substitutable or complementary Give a reason for your answer (c) Find the value of P when Q 235, Y 8000, T 30 and Pr 25 (d) The exogenous variables are now fixed at Y 2000, T 10 and Pr 5 State the values of the slope and vertical intercept when the demand function is sketched with (i) P on the horizontal axis and Q on the vertical axis (ii) Q on the horizontal axis and P on the vertical axis

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Question: A demand function of a certain good is given by Q = 20 P + 0.04 Y + 4 T + 3 Pr where Q

A demand function of a certain good is given by Q = 20P + 0.04Y + 4T + 3Pr

where Q and P denote the quantity and price of the good, Y is income, T is taste and Pr is the price of a related good.

(a)CalculateQwhenP=8,Y=1000,T=15andPr =30.

(b) Is the related good substitutable or complementary? Give a reason for your answer.

(d) The exogenous variables are now fixed at Y = 2000, T = 10 and Pr = 5. State the values of the slope and vertical intercept when the demand function is sketched with

(i) P on the horizontal axis and Q on the vertical axis; (ii) Q on the horizontal axis and P on the vertical axis.

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