# Question: please assist in the following demand supply and market equilibrium...

###### Question details

Please assist in the following:

Demand, Supply, and Market Equilibrium

Q1. The general demand
function for good *A* is

*Q _{d}*
= 754 + 2P

_{A}- 0.05M + 6 P

_{B}+ 10 T + 3 P

_{E}+ 2N

where
*Q _{d}* = quantity demanded of good A each month,

*P*= price of good

_{A}*A*,

*M*= average household income,

*P*= price of related good

_{B}*B*, T = a consumer taste index ranging in value from 0 to 10 (the highest rating),

*P*= price consumers expect to pay next month for good

_{E}*A*, and

*N*= number of buyers in the market for good

*A*.

*a*. Interpret
the intercept parameter in the general demand function. (1
point)

*b*. What is
the value of the slope parameter for the price of good *A*?
Does it have the correct algebraic sign? Why? (1 point)

*c*. Interpret
the slope parameter for income. Is good *A* normal or
inferior? Explain. (1 point)

*d*. Are goods
*A* and *B* substitutes or complements? Explain.
Interpret the slope parameter for the price of good *B*. (1
point)

*e*. Are the
algebraic signs on the slope parameters for ,
*P _{E}*, and

*N*correct? Explain. (1 point)

f. Calculate the
quantity demanded of good *A* when *P _{A}* =
$2,

*M*= $60,000,

*P*=$24, = 7,

_{B}*P*= $12, and

_{E}*N*= 12,000. (2.5 point)