Answer to Question #220560 in Microeconomics for Nitin

Question

□ Emily has decided to spend one-third of her income on clothing. What is Emily’s demand curve for clothing?

□ Emily’s taste – as reported in the previous question - has now changed. She now realizes the importance of savings and spends only one-tenth of her income on clothing, instead of one-third. How will Emily’s demand curve change?

Answer 1

a)demand function

$Q = a - bP$

where Q=linear demand curve,a=factors influencing demand besides price,b=slope and p=price

$Q = a - \frac{1}{3}P$

b)demand function

$Q = a - bP$

where Q=linear demand curve,a=factors influencing demand besides price,b=slope and p=price

$Q = a - \frac{1}{10}P$