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A firm’s demand equation is given by: Qd = 60 – 60P + 2Y, where Qd is quantity, P is price, and Y is income. If price increases by $2 and income increases by $80, then quantity demanded will:a. increase by 160 units.b. increase by 80 units.c. decrease by 120 units.d. increase by 40 units.e. decrease by 60 units.

Respuesta :

TomShelby

Answer:

d. increase by 40 units

Explanation:

We post the increments in the formula and check;

Qd`` = 60 - 60(p + 2) + 2(Y + 80)

Qd`` = 60 - 120 - 60p + 160 + 2Y

Qd`` = 100 - 60p + 2Y

Qd   =  60 - 60p + 2Y

we subtract one from another and the difference is the incremental oor decremental that arise as a result of the changes:

100 - 60 - 60p - (-60p) + 2y - 2y = 40

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