Answer to Question #71360 in Microeconomics for Hassan

Question

Choose a product of your interest to determine the most important determinants of its demand. You need to develop this into a generic demand function of the form
Qx = a0 + a1 Px + a2 I + a3 Py ……

Answer 1

Consequently, we have the equation of demand for the product x, we find the equation of demand for the product y:
Qx = a0 + a1 Px + a2 I + a3 Py;
I = (Qx – (a0 + a1 Px + a3 Py)) / a2 ; I = Px*Qx + Py*Qy
(Qx – (a0 + a1 Px + a3 Py)) / a2 = Px*Qx + Py*Qy
(((Qx – (a0 + a1 Px + a3 Py)) / a2) - Px*Qx) / Py = Qy