Suppose the relationship between quantity demanded and


Suppose the relationship between quantity demanded and price and income is estimated to be

Q = 30P-2.5 I-0.8

a) What effect on quantity demanded (in percentage terms) will have a 5% change in price have?

b) What effect will a 10% price increase have on total revenue?

c) Is this a normal, inferior, or luxury good? Explain.

Solution Preview :

Prepared by a verified Expert
Macroeconomics: Suppose the relationship between quantity demanded and
Reference No:- TGS01695982

Now Priced at $15 (50% Discount)

Recommended (90%)

Rated (4.3/5)