Consider the following demand function for good X: X = 200 – 4P, + P 3M P, is the price of good X, P, is the price of good Y, and M is income. Currently, P, = $2, P, = $4, and M = $100.
Consider the following demand function for good X: X = 200 – 4P, + P 3M P, is the price of good X, P, is the price of good Y, and M is income. Currently, P, = $2, P, = $4, and M = $100.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Hello, I need help solving this practice problem. I already figured out part A and B but I am not getting C correct.

Transcribed Image Text:Consider the following demand function for good X:
X = 200 – 4P, +P? + 3M
P, is the price of good X, P, is the price of good Y, and M is income. Currently, P, = $2, P, = $4,
and M = $100.

Transcribed Image Text:С. I.
II.
Compute the income elasticity for good X. Show your work.
Is good X normal or inferior?
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