Suppose the demand for X is given by Qxd 100 2PX 4PY 10M

Suppose the demand for X is given by Qxd = 100 – 2PX – 4PY + 10M + 2A, where PX represents the price of good X, PY is the price of good Y, M is income, and A is the amount of advertising on good X. Based on this information, we know that good X is a:

Solution

Qxd = 100 – 2PX – 4PY + 10M + 2A ------------------------------- (1)

On the basis of above equation 1,

Product X is a normal good.   It is because of following reasons: