Question
3) A consumer's demand function for good x is Qx = 120 - 2Px - Py + Pz/2+ I/1000 with Qx representing the quantity demand
3) A consumer's demand function for good x is Qx = 120 - 2Px - Py + Pz/2+ I/1000 with Qx representing the quantity demand for good x, Px the price for good x, Py the price for good y, Pz the price for good z, and I the consumer's income.
a) Determine the quantity demanded for good x if Px = Py = Pz = 20 and I = 2000.
b) Determine the inverse demand function for good x if Py = Pz = 20 and I = 4000.
c) Determine whether good y is a complement or substitute to good x.
d) Determine whether good z is a complement or substitute to good x.
e) Determine whether good x is a normal or inferior good.
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