The demand curve is given by Q D = 500 - 5P X + 0.51 + 10P
Question:
The demand curve is given by QD = 500 - 5PX + 0.51 + 10PY - 2PZ where
QD-quantity demanded of good X Px = price of good X
I = consumer income, in thousands Py = price of good Y Pz = price of good Z
a. Based on the demand curve above, is X a normal or an inferior good?
b. Based on the demand curve above, what is the relationship between good X and good F?
c. Based on the demand curve above, what is the relationship between good X and good Z?
d. What is the equation of the demand curve if consumer incomes are $30,000, the price of good F is $10, and the price of good Z is $20?
e. Graph the demand curve that you found in (d), showing intercepts and slope.
f. If the price of good X is $15, what is the quantity demanded? Show this point on your demand curve.
g. Now suppose the price of good Y rises to $15 Graph the new demand curve.
Step by Step Answer:
a X is a normal good We know this because there is a positive relationship be...View the full answer
