Question
Below are three different demand functions for three different goods. Note that m is the consumer's income and p2 is the price of another good.
Below are three different demand functions for three different goods. Note that m is the consumer's income and p2 is the price of another good. pA, pB , and pC are the prices of the three goods respectively. A) (5 marks) xA = m/10 p2 pA B) (5 marks) xB = 3000 m 30pB C) (5 marks) xC = 1000 + 10 pC/p2 m For each of these demand curves, answer the following questions 1. Accurately graph the demand function assuming an income of $1000 and a price of good 2 of $10. Hint: Excel can be very helpful here if you wish. 2. Is this good a normal good or an inferior good? You must justify your answer. 3. Is good 2 a complement of the good, a substitute for the good, or neither? You must justify your answer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started