The general demand function for goodA is Qd6004PA003M12PB+.pdf

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The general demand function for goodA is Qd=6004PA0.03M12PB+6PE where Qd is quantity demanded of goodA each month, PA is price of goodA,M is average household income, PB is price of related goodB,PE is price consumers expect to pay next month for goodA a. Interpret the intercept parameter in the general demand function. 5 marks b. Interpret the slope of the price of goodA. 5 marks c. Interpret the coefficient of PE 5 marks d. Find and interpret the Income Elasticity of Demand. Is good A normal or inferior? Explain. 5 marks e. Are goods A and B substitutes or complements? Explain. 5 marks.

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