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Let the demand for some item is represented as D = 30 - 2p + 0.04 Y + 4 s where D is the quantity demanded in units a year, p is the price of the item in dollars per unit, Y is the buyer's income in thousands of dollars a year, and s is the value of another factor such as preference.
Question 1: Suppose Y = 100 and s = 0.5, describe in words the relationship between quantity demanded and price.
Question 2: Examine the effect of changes in prices and changes in income on the demand curve. Clearly explain the differences in the quantity demanded due to these changes
Question 3: What are some of the questions you will ask as an advisor to the owner of firm facing such demand conditions?
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