Answer to Question #165208 in Microeconomics for Rashed

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. i. What type of good is Y? Explain your answer.

ii. What type of good is Z? Explain your answer.

iii.Interpret the coefficients of Px, Py, Pz, and M.

Answer 1

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