Question: Question 1. (22) The generalized demand function for a product X (based on periodic assessment by a firm) is given by the following equation: Qx=

Question 1. (22) The generalized demand function for a product X (based on periodic assessment by a firm) is given by the following equation: Qx= 600 -ti.l:Px - .032-12 Py + 15 B +1.5 C +6 Pt Qx: quantity demand of product x Px = price of x per unit Py = price of y per unit (related product) Pt = price of x per unit (product) that they may be expected to pay next time period t. Z = average household income B=a taste index ranging from 0-10 (10 is the highest) C= overall number of buyers in the market for product X 1. How would you interpret the 600 (or intercept) in the above demand function? (4)

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