The generalized demand and supply functions for good X areQd = 638 8P + 0.005M 4PY Qs = 300 + 3PWhereQD = quantity demanded of good XP = price of good XM = consumer incomePY = price of good YQS = quantity supplied of good XP = price of good Xa. Are good X and good Y substitutes or complements? How do you know?b. Is good X a normal good or an inferior good? How do you know?c. What is the demand function when M = $15000 PY = $20?d. Solve for the equilibrium price (Po) and the equilibrium quantity (Qo).e. Suppose that on average consumer income rises to $20000. Solve for the new equilibrium price (P1) and the new equilibrium quantity (Q1).
