Suppose the demand for X is given by Q_x^d = 100 − 2P_X + 4P_Y + 10M + 2A,where P_X represents the price of good X,P_Y is the price of good Y,M is income,and A is the amount of advertising on good X.If advertising on good X increases by $10,000,then the demand for X will:

Question

Quizplus · Accepted Answer

The coefficient of A in the demand equation is positive, which means that an increase in advertising leads to an increase in the quantity demanded of good X. The change in demand can be calculated as:
∆Q = (∂Q/∂A) * ∆A
where ∂Q/∂A is the partial derivative of demand with respect to advertising, and ∆A = $10,000. Taking the derivative of the demand equation with respect to A, we get:
∂Q/∂A = 2
Therefore, ∆Q = 2 * $10,000 = $20,000. Since the question asks for the change in demand (not quantity demanded), the answer is D: increase by $20,000.

Suppose the Demand for X Is Given by Qxd =

Suppose the Demand for X Is Given by Q_x^d =