1. Suppose that the demand and supply functions for good X areQ, --600 + 10PXWhere Py is the sales price of good X, M is average consumer income, PR isthe price of a related good.IFa. Is good X a normal or inferior good?b. Are good X and R complements of substitutes? Explain?Suppose M = $50,000 and PR - $20c. What is the direct demand function for good X?d. What is the equilibrium price and quantity?

An inferior good is one whose demand drops when people's incomes rise. When incomes are low or the…

-600 + 10PX Where Px is the sales price of good X, M is average consumer income, PR is the price of a related good. a. Is good X a normal or inferior good? b. Are good X and R complements of substitutes? Explain? Suppose M = $50,000 and PR = $20 c. What is the direct demand function for good X? d. M

-600 + 10PX Where Px is the sales price of good X, M is average consumer income, PR is the price of a related good. a. Is good X a normal or inferior good? b. Are good X and R complements of substitutes? Explain? Suppose M = $50,000 and PR = $20 c. What is the direct demand function for good X? d. M

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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