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Posted: May 10th, 2024

ECO 329 – The X-corporation produces a good (called X) that is a normal good

Refer the following book Page No 60 t0 69https://mnaeemiqbal.files.wordpress.com/2014/03/managerial-economics-michael-baye.pdfThe X-corporation produces a good (called X) that is a normal good. Its competitor, Y-Corpor., makes a substitute good that it markets under the name âY.â Good Y is an inferior good.How will the demand for good X change if consumer incomes decrease?Hint: Draw the original values for the demand and supply curve and then show how a decrease in income will demand. Label your curves and points, following the use of comparative statics given on page 63.How will the demand for Good Y change if consumer incomes increase?Hint: Again draw the original curves and show how the relevant curve will be shifted. Label accordingly.How will the demand for good X change if the price of good Y increases?Hint: Use comparative statics as explained above. Is good Y a lower-quality product than good X? Explain

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