Calculate demand using the current market conditions

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Reference no: EM13998556

Suppose you have the generic demand curve

Q = 3000 - 400P – 300P1 + 200P2 + 0.05I

Where P is the price of the good, P1 and P2 are prices of related goods and I is income.

Currently P is $1.00, P1 is $0.50, P2 is $1.50 and I is $50,000.

1) Calculate demand using the current market conditions. 2)Is P1 a substitute or complement? (Why) 3) Is P2 a substitute or complement? (Why) 4) Is this product normal it inferior to Income? (Why) 5) Under current market conditions calculate the price elasticity for this product. 6) What conclusions can be made from the elasticity you calculated in question 5?

Reference no: EM13998556

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