Question

Assume a demand equation for good​ 'x': Upper Q equals 9 minus 0.1 p minus p Subscript y Baseline plus 0.01 p Subscript z Baseline plus 0.0005 Upper Y​; where p​ = own price of the good py​ = price of a related good​ = $3 Q​ = quantity demanded pz​ = price of a different related good​ = $200 Y​ = consumer income​ = $4,000/mo. The quantity demanded as a function of the price can be​ written: Q​ = nothing If the price of this good​ 'x' is equal to ​$42 per​ unit, what would be the quantity​ demanded? nothing units. ​(enter your response rounded to one decimal place​)

Answer 1

Answer: Q = 5.8 units

Explanation:

Q = 9 - 0.1p - py + 0.01pz + 0.0005Y

Where,

p​ = own price of the good

py​ = price of a related good​ = $3

Q​ = quantity demanded

pz​ = price of a different related good​ = $200

Y​ = consumer income​ = $4,000/mo

Therefore,

Q = 9 - 0.1p - 3 + 0.01 × 200 + 0.0005 × 4000

Q = 9 - 0.1p - 3 + 2 + 2

Q = 10 - 0.1p

If price of this good​ 'x' is equal to ​$42 per​ unit then,

Q = 10 - 0.1 × 42

   = 10 - 4.2

Q = 5.8 units ⇒ Quantity demanded