Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM. From the law of demand we know that a_x will be:

Question

Quizplus · Accepted Answer

The law of demand states that the quantity demanded of a good decreases as its price increases, all other things being equal. Therefore, the coefficient of price (a_x) in the demand equation should be negative. Thus, the answer is A: less than zero.

Suppose the Demand for Good X Is Given by Qdx

Suppose the Demand for Good X Is Given by Q^d_x