Answer to Question #165450 in Microeconomics for Prathiksha

Question

Suppose the demand for a product is given by Qc=200 - 2Pt+Pc where Qc is the quantity demand for coffee,Pc is the price of coffee,Pt is the price of the substitute good tea.The price of the substitute good is  ₹400/kg.Suppos Pc=₹620/kg what would be the demand of coffee?

Answer 1

Let the demand for a product is given by

$$Q_c=200-2P_t+P_c.$$

If the price of the substitute good tea is ₹400/kg and the price of coffee is ₹620/kg, the demand of coffee would be:

$$Q_c=200-2\cdot400+620=20\ units.$$