Using equation (2.4), what is the demand equation as a function of Ps if the price of other pastas ( P o ) is $3, the individual’s income ( Y ) in thousands is $25, and tastes ( Z ) are represented by 20? What happens if the individual’s income increases to $40?
(2.4)
Here the notation Q d = f (. . .) is read, "Quantity demanded is a function of P s , P o , Y , and Z ." If the function in (2.3) also happens to be linear, its more specifi c form would have a charac-teristic linear look to it. Statisticians frequently use this case, and it is useful to look at an example. A linear spaghetti demand function, for example, might look like this:
Q d = 500 – 10 P s + 5 P o + 20 Y + 40 Z
