Demand Function
1. **State the problem:** We have the demand function $$Q_{dx} = 10000 - 2p_x + 2m - 5p_y + 2.5t_f - 1t + 3a$$ where $Q_{dx}$ is quantity demanded of good x.
Given values: $p_x=10$, $m=50$, $p_y=5$, $t_f=6$, $t=4$, $a=50$.
We need to find:
1. Quantity of x bought.
2. Relationship between good x and y.
3. Type of good x.
4. Effect on demand if tax $t$ increases by 10.
2. **Calculate quantity demanded with given values:**
Substitute values into the demand function:
$$Q_{dx} = 10000 - 2(10) + 2(50) - 5(5) + 2.5(6) - 1(4) + 3(50)$$
Calculate step-by-step:
$$= 10000 - 20 + 100 - 25 + 15 - 4 + 150$$
$$= 10000 + ( -20 + 100 - 25 + 15 - 4 + 150 )$$
$$= 10000 + 216 = 10216$$
So, quantity demanded $Q_{dx} = 10216$ units.
3. **Relationship between good x and y:**
Coefficient of $p_y$ is $-5$ (negative).
Since demand decreases when price of y increases, goods x and y are **complements**.
4. **Type of good x:**
Coefficient of income $m$ is $+2$ (positive).
Since demand increases as income increases, good x is a **normal good**.
5. **Effect of increasing tax $t$ by 10:**
Original tax $t=4$, new tax $t=14$.
Change in tax $= 14 - 4 = 10$.
Effect on demand due to tax change:
$$ ext{Change in } Q_{dx} = -1 imes 10 = -10$$
Demand decreases by 10 units.
New quantity demanded:
$$Q_{dx,new} = 10216 - 10 = 10206$$
**Final answers:**
1. Quantity demanded = $10216$ units.
2. Goods x and y are complements.
3. Good x is a normal good.
4. Increasing tax by 10 decreases demand by 10 units, new demand is $10206$ units.