Answer to Question #67170 in Macroeconomics for soumedha Ramkhelawon
Demand is inelastic at prices below the midpoint price, and demand is elastic at prices above the midpoint price.
The owner of the football club will conduct a pricing policy depending on the elasticity of demand
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A firm’s demand function for good x is estimated as follows:-
Qx = 1800 –1/4Px + 1/8Py – 1/3Pz + 1/5Y
Where Qx represents quantity demanded of good x, Px is price of good x, Py is price of good y, Pz is price of good z and Y is income.
Explain whether goods Y and Z are substitutes or complements for good X. (5 marks)