Question

. Recall that the general demand function for the demand curves in Figure 2.2 is

Q_d = 3,200 - 10P + 0.05M + 24 P_R

Derive the demand function for D₂ in Figure 2.2. Recall that for D₂ income is 52,000 and the price of the related good is $200.

Answer 1

$Qd = 3200-10p + 0.005 (5200) -24(200)$

$= 3200-10p+2600-4800$

The demand function is therefore;

$= -10p +1000$