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Equation (1)

Qdx=f(Px,I,Py,...)

Qdx = the quantity demanded of some good *X* (e.g. per household demand for gasoline in gallons per week),

*P _{x}* = Price of good X

It may be read, “Quantity demanded of good

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**3.1. The Demand Function and the Demand Curve**

demand function . (In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.) We represent such a demand function in Equation 1: <span>Equation (1) Qdx=f(Px,I,Py,...) where Qdx represents the quantity demanded of some good X (such as per household demand for gasoline in gallons per week), P x is the price per unit of good X (such as $ per gallon), I is consumers’ income (as in $1,000s per household annually), and P y is the price of another good, Y. (There can be many other goods, not just one, and they can be complements or substitutes.) Equation 1 may be read, “Quantity demanded of good X depends on (is a function of) the price of good X, consumers’ income, the price of good Y, and so on.” Often, economists use simple linear equations to approximate real-world demand and supply functions in relevant ranges. A hypothetical example of a specific demand function

demand function . (In general, a function is a relationship that assigns a unique value to a dependent variable for any given set of values of a group of independent variables.) We represent such a demand function in Equation 1: <span>Equation (1) Qdx=f(Px,I,Py,...) where Qdx represents the quantity demanded of some good X (such as per household demand for gasoline in gallons per week), P x is the price per unit of good X (such as $ per gallon), I is consumers’ income (as in $1,000s per household annually), and P y is the price of another good, Y. (There can be many other goods, not just one, and they can be complements or substitutes.) Equation 1 may be read, “Quantity demanded of good X depends on (is a function of) the price of good X, consumers’ income, the price of good Y, and so on.” Often, economists use simple linear equations to approximate real-world demand and supply functions in relevant ranges. A hypothetical example of a specific demand function

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