(Answered) The estimated market demand for good x iscircq 70 ndash

Economics

The estimated market demand for good X is

ˆQ = 70 – 3.5P – 0.6M + 4Pzwhere ˆQ 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 (?) income, (?M), and cross-price elasticties (?

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Microeconomics, Economics

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