- An economic consultant for X Corp. recently provided the firm's marketing manager with this estimate
of the demand function for the firm's product. Qx d = 12,000 -3Px + 4Py - 1M + 2Ax where d = amount consumed of good X, Px = price of good X, Py = price of good Y, M = income, and Ax = amount of advertising spent on good X. Suppose good X sells for $200 per unit, good Y sells for $15 per unit, the company utilizes 2,000 units of advertising, and consumer income is $10,000.
- How much of good X do consumers purchase?
- Are goods X and Y substitutes or complements?
- Is good X a normal or an inferior good?