Assume that the following is the result of a demand estimation:
$$Q _ { X } = 1000 - 20 P _ { X } + 4 \text { mame } + 10 P _ { Y } - 15 P _ { Z }$$ Assuming that all coefficients are statistically significant and the model does not suffer from any estimation issues, which of the following statements is wrong:
A) X is a normal good
B) X and Y are competing products
C) X and Z are competing products
D) A rise in the price of X reduces the quantity of X demanded

Question

Quizplus · Accepted Answer

The positive coefficient of $ P _ { Y } $ indicates that X and Y are substitutes (competing products), while the negative coefficient of $ P _ { Z } $ indicates that X and Z are complements, not competing products.

Assume That the Following Is the Result of a Demand QX=1000−20PX+4 mame +10PY−15PZQ _ { X } = 1000 - 20 P _ { X } + 4 \text { mame } + 10 P _ { Y } - 15 P _ { Z }QX​=1000−20PX​+4 mame +10PY​−15PZ​

Assume That the Following Is the Result of a Demand $Q _ { X } = 1000 - 20 P _ { X } + 4 \text { mame } + 10 P _ { Y } - 15 P _ { Z }$