Suppose the demand function for product X is estimated by the equation: QDX= -2PX + 0,5PY - 0,2PZ + 1,2I. In there: QDX is the quantity demanded of product X PX is the price of product X PY is the price of product Y PZ is the price of product Z I is the average income of consumers a/ Please make an argument to determine the relationship between two products X and Y, X and Z. b/ Please make an argument to determine whether product X is an ordinary good or a low-end good

Suppose the demand function for product X is estimated by the equation: QDX= -2PX + 0,5PY - 0,2PZ + 1,2I. In there: QDX is the quantity demanded of product X PX is the price of product X PY is the price of product Y PZ is the price of product Z I is the average income of consumers a/ Please make an argument to determine the relationship between two products X and Y, X and Z. b/ Please make an argument to determine whether product X is an ordinary good or a low-end good

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...

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A TV channel has estimated the demand for its service to be givenby the following function: Q=9.83p-1.2A2.5Y1.6P0-1.4whereQ = monthly sales in unitsP = price of the service in $A = promotional expenditure in $’000Y = average income of the market in $’000P0 = price of ‘home movies’ in $ The current price of the TV channel is $60, promotional expenditure is$120,000, average income is $28,000, and the price of ‘homemovies’ is$45.Indicate whether the following statements are true or false, givingyour reasons and making the necessary corrections h. Current sales are over a million units a month. i. The demand curve for the channel is given by:Q=9.83p-1.2j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.k. If the channel increases its price this will reduce its profit.
According to economic theory, the demand x for a quantity in a free market decreases as the price p increases (see the figure). Suppose that the number x of DVD players people are willing dx (A) Find 9,000 to buy per week from a retail chain at a price of $p is given by x = 10 sp<70. 0.3p + 1' dx Answer parts (A), (B), and (C). dp 4500- (B) Find the demand and the instantaneous rate of change of demand with respect to price when the price is $30. Write a brief interpretation of these results. The demand is x = when the price is $30. 2250- 9,000 The instantaneous rate of change of demand with respect to price is when the price is X = 0.3p + 1 $30. Write a brief interpretation of these results. p. 0- 40 80 At a price level of $30, the demand is DVD players per week and demand is Price (dollars) V at the rate of (C) Use the results from part (B) to estimate the demand if the price is increased to $31. Demand .....
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