You have the following demand function: QD=300-2*P Where the "300" is actually in three parts, an intercept term, an income term (M), and a "price of related good" term (PR) as we've been doing all semester. So, when the demand function is pulled apart, you have this: QD=40-2°P + 2 M + 4°PR And M = 80 and PR = 25. (If you plug in those two numbers you'll see you get exactly the top equation. Now, one of two things could happen: M could increase to 100, or PR could increase to 35. Do the math to answer this question. And remember, I'm asking (below) about the demand curve. Which of the following is correct? Multiple Choice The increase in income (M) would shift this demand curve farther to the right than the increase in PR would. The increase in PR would shift this demand curve farther to the right than the increase in income (M) would The two changes would shift the demand curve exactly the same amount None of the above is correct

You have the following demand function: QD=300-2*P Where the "300" is actually in three parts, an intercept term, an income term (M), and a "price of related good" term (PR) as we've been doing all semester. So, when the demand function is pulled apart, you have this: QD=40-2°P + 2 M + 4°PR And M = 80 and PR = 25. (If you plug in those two numbers you'll see you get exactly the top equation. Now, one of two things could happen: M could increase to 100, or PR could increase to 35. Do the math to answer this question. And remember, I'm asking (below) about the demand curve. Which of the following is correct? Multiple Choice The increase in income (M) would shift this demand curve farther to the right than the increase in PR would. The increase in PR would shift this demand curve farther to the right than the increase in income (M) would The two changes would shift the demand curve exactly the same amount None of the above is correct

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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