Assume a demand equation for good 'x': Upper Q equals 9 minus 0.1 p minus p Subscript y Baseline plus 0.01 p Subscript z Baseline plus 0.0005 Upper Y ; where p = own price of the good py = price of a related good = $3 Q = quantity demanded pz = price of a different related good = $200 Y = consumer income = $4,000/mo. The quantity demanded as a function of the price can be written: Q = nothing If the price of this good 'x' is equal to $42 per unit, what would be the quantity demanded? nothing units. (enter your response rounded to one decimal place )

Question

Yael

Business

30 December, 07:27

Assume a demand equation for good 'x': Upper Q equals 9 minus 0.1 p minus p Subscript y Baseline plus 0.01 p Subscript z Baseline plus 0.0005 Upper Y ; where p = own price of the good py = price of a related good = $3 Q = quantity demanded pz = price of a different related good = $200 Y = consumer income = $4,000/mo. The quantity demanded as a function of the price can be written: Q = nothing If the price of this good 'x' is equal to $42 per unit, what would be the quantity demanded? nothing units. (enter your response rounded to one decimal place )

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Answers (1)

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Nicholson · Answer 1

Answer: Q = 5.8 units

Explanation:

Q = 9 - 0.1p - py + 0.01pz + 0.0005Y

Where,

p = own price of the good

py = price of a related good = $3

Q = quantity demanded

pz = price of a different related good = $200

Y = consumer income = $4,000/mo

Therefore,

Q = 9 - 0.1p - 3 + 0.01 * 200 + 0.0005 * 4000

Q = 9 - 0.1p - 3 + 2 + 2

Q = 10 - 0.1p

If price of this good 'x' is equal to $42 per unit then,

Q = 10 - 0.1 * 42

= 10 - 4.2

Q = 5.8 units ⇒ Quantity demanded