The demand function of a good is Q = 100 P + 2Y + 1/2A where
Question:
The demand function of a good is
Q = 100 − P + 2Y + 1/2A
where Q, P, Y and A denote quantity demanded, price, income and advertising expenditure, respectively.
(a) Calculate the demand when P = 10, Y = 40 and A = 6. Assuming that price and income are fixed, calculate the additional advertising expenditure needed to raise demand to 179 units.
(b) Is this good inferior or normal?
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a Q100102x40x6173 x6173 2 To work out the new advertising exp...View the full answer
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