Question

Q_X^d = 30,000 -20P_X - 8P_Y + 0.5M

                where P_Xis the price of X

                                P_Y is the price of a related good Y

                                M is the income of the buyers in the market.

Given the above demand curve, how many of good X will consumer purchase when P_X is $100 a unit, P_Y is $50 a unit, and M is $25,000?

Answer 1

Q_X^d = 30,000 -20P_X - 8P_Y + 0.5M

                where P_X is the price of X

                                P_Y is the price of a related good Y

                                M is the income of the buyers in the market.

Given the above demand curve,

When P_X is $100 a unit, P_Y is $50 a unit, and M is $25,000

Q_X^d = 30,000 -20P_X - 8P_Y + 0.5M

Q_X^d = 30,000 -20(100) – 8(50) + 0.5(25,000)

       =30,000-2000-400+12,500

Q_X^d = $40,100