Question

Assume a demand equation for good​ 'x': Q = 9 - 0.1p - p_y + 0.01p_z + 0.0005Y; where p = own price of the good Q = quantity demanded p_y = price of a related good = $3 p_z = price of a different related good = $200 Y = consumer income = $4,000/mo. The quantity demanded as a function of the price can be written:

Answer 1

Answer:

Q = 10 - 0.1p

Explanation:

Given that,

Demand equation for good​ 'x':

Q = 9 - 0.1p - p_y + 0.01p_z + 0.0005Y

Where,

p = own price of the good

Q = quantity demanded

p_y = price of a related good = $3

p_z = price of a different related good = $200

Y = consumer income = $4,000/month

Therefore, the quantity demanded as a function of the price can be written as follows;

Q = 9 - 0.1p - p_y + 0.01p_z + 0.0005Y

Q = 9 - 0.1p - 3 + 0.01(200) + 0.0005(4,000)

Q = 6 - 0.1p + 2 + 2

Q = 10 - 0.1p