Business, 06.12.2020 14:00 gabriella80

The estimated market demand for good X is Q = 70 - 3.5P - 0.6M + 4PZ where Q ˆ is the estimated number of units of good X demanded, P is the price of the

good, M is income, and PZ is the price of related good Z. (All parameter estimates are
statistically significant at the 1 percent level.)
a. Is X a normal or an inferior good? Explain.
b. Are X and Z substitutes or complements? Explain.
c. At P = 10, M = 30, and PZ = 6, compute estimates for the price (E ˆ), income (E ˆ M), and
cross-price elasticities (E ˆ XZ).

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The estimated market demand for good X is Q = 70 - 3.5P - 0.6M + 4PZ where Q ˆ is the estimated num...

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