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(Solved): You now know that demand equations can be estimated using regression methodology. Suppose that you c ...



You now know that demand equations can be estimated using regression methodology. Suppose that you collect data and run a regression to estimate the demand equation for a particular product. The resulting demand equation is as follows: QD=6000-2PX-0.2I+4PY-2PZ Where: QD = quantity demanded of good X PX = price of good X I = consumer income, in thousands PY = price of good Y PZ = price of good Z Based on the equation, what is the relationship between Good X and Good Z? Option A Good X and Good Z are substitutes for consumers. Option B Good X and Good Z are complements for consumers. Option C Good X and Good Z are unrelated goods. Option D Good X is an input in the production of Good Z.



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