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Answered Same Day Sep 30, 2021

Solution

Komalavalli answered on Sep 30 2021

145 Votes

QD= Y-3P
a.
Variable P and QD are endogenous variable because their values determined within the system and the variable Y is exogenous, because this value is determined outside the system.
. Negative sign before the term 3P indicates that the price and quantity demand are negatively related, when price increase the quantity demand for the product decreases. Positive sign before Y indicates income and quantity demand are positively related one, when income increases the demand for the product also increases.
c)
QD= 6000-3P
d)
P=500
QD= 6000-3*500
QD= 6000-1500
QD= 4500
P=500
QD= 6000-3*1000
QD= 6000-3000
QD=3000
P=2000
QD= 6000-3*2000
QD= 6000-6000
QD= 0
    QD=6000-3P

    P
    QD
    500
    4500
    1000
    3000
    2000
    0
e)
f)
    QD=6000-3P

    P
    QD
    500
    4500
    1000
    3000
    2000
    0
When price increases from $1000 to $2000, change in quantity demand is
Change in quantity demand ∆QD = 6000-3*∆P
∆QD = 6000-3*(2000-1000)
∆QD = 6000-3*(1000)
∆QD = 3000
When price increases from $500 to $1000, change in quantity demand is
Change in quantity demand ∆QD = 6000-3*∆P
∆QD = 6000-3*(1000-500)
∆QD = 6000-3*(500)
∆QD =...

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