Based on the following generalized demand function, Qd=100-5 P + 0.004 M - 5 PR, it...
Based on the following generalized demand function, Qd=100-5 P + 0.004 M - 5 PR, it is clear that the good in question and the related goods are A. Substitutes B. Complements C. both a and b D. The good should not be reproduced
Homework Answers
Given the demand function, Qd=100-5 P + 0.004 M - 5 PR
Where P is the price of Good
M is the income
Pr is the price of related good
Since increase in price increases the sale of related good, they are perfect substitutes.
Hence the answer is option A. Substitutes
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