Question #87559

The demand function for product X is: Qd = 600 – 20Px + 0.02Y – 5Pr

The supply function is: Qs = –300 + 10Px

Where:

Qd = the quantity of X demanded

Qs = the quantity of X supplied

Px = the price of product X

Y = the average consumer income

Pr = the price of the related product R

If Y = R35 000 and Pr = R20, draw the precise demand curve for

product X

The supply function is: Qs = –300 + 10Px

Where:

Qd = the quantity of X demanded

Qs = the quantity of X supplied

Px = the price of product X

Y = the average consumer income

Pr = the price of the related product R

If Y = R35 000 and Pr = R20, draw the precise demand curve for

product X

Expert's answer

If Y = R35 000 and Pr = R20, then Qd = 600 - 20Px + 0.02×35000 - 5×20 = 1200 - 20Px.

Px = 60 - Q/20, this function can be drawn as a demand curve, which is a downward-sloping line.

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