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Suppose that the general demand function for good X is given

Paper help Economics Suppose that the general demand function for good X is given

Economics

Suppose that the general demand function for good X is given

Suppose that the general demand function for good X is given as: (Qd=60-2Px+0.01M+7Pr) Where … Show more Suppose that the general demand function for good X is given as: (Qd=60-2Px+0.01M+7Pr) Where Qd = quantity of X demanded Px = price of X M = (average) consumer income Pr = price of related good r a. Is the good X normal or inferior? Explain. b. Are goods X and r substitutes or complements? Explain. Suppose that M = $40,000 and Pr = $20 c. What is the demand function for good X? Suppose the supply function is Qs = -600+10Px d. What are equilibrium price and quantity if other things remain the same as in part d but income increases to $52,000? Hint: Substitute income and relative goods to equation so as to make Q = f(P) • Show less

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