Question

Demand function for a normal good X is given as Qdx =4–0.4Px –0.2Py +0.3Pz +0.3M

where Qdx is quantity demanded for good X, Px is price of good X, Py and Pz are

prices of related goods, and M is income. Y is good Y and Z is good Z.

Answer 1

$Qdx = 4–0.4Px –0.2Py + 0.3Pz + 0.3M$

let

Px=200

Py=250

Pz=300

M=30 000

substitute in the equation

$Qdx = 4–0.4Px –0.2Py + 0.3Pz + 0.3M=4-0.4\times200-0.2\times250+0.3\times300+0.3\times30 000=8964$