Answer to Question #52341 in Microeconomics for lawrence

Question

Estimated demand function for processed pork is Q=171-20p+20pb+3pc+2y. Using the estimated demand function for processed pork, show how quantity demand changes at a given price as per capital income ,Y, increases by $ 100 a year?

Answer 1

If the estimated demand function for processed pork is Q=171-20p+20pb+3pc+2y, then if using this function per capital income Y increases by N100 a year, the quantity demanded at a given price will increase by 2*100 = 200 units, there is a direct dependence between these two values.