Reference no: EM132140766
1. The demand for good X is given by: QXd = 6,000 - ½ PX - PY + 9PZ + 1/10M Research shows that the prices of related goods are given by PY = $6,500 and PZ = $100, while the average income of the individuals consuming this product is M = $70,000.
a. Indicate whether goods Y and Z are substitutes or complements for good X.
b. Is X an inferior good or normal good?
c. How many units of good X will be purchased when PX = $5,230?
d. Determine the demand function and inverse demand function for good X. Graph the demand curve for good X.
2. The demand curve for product x is given by QXd= 300 - 2PX
a.) Find the inverse demand curve.
b.) How much consumer surplus do consumers receive when PX=$45?
c.) How much consumer surplus do consumers receive when PX=$30?
d.) In general, to the level of consumer surplus as the price as the price of a good falls?