Use the following general linear demand relation:Qd = 100 - 5P + 0.004M - 5PRwhere P is the price of good X, M is income, and PR is the price of a related good, R.From the demand function it is apparent that related good R is
A. normal.
B. inferior.
C. a substitute for good X .
D. a complement for good X.
Answer: D
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The law of supply reflects the negative relationship between the price of a good or service and the quantity of that good or service that sellers are willing to offer for sale
Indicate whether the statement is true or false
The optimal purchase rule is stated as
A. TU = MU. B. MU = P. C. TU = P. D. MU = 0.
Which of the following would be most likely to have monopoly power?
a. a long-distance telephone service provider b. a local cable TV provider c. a large department store d. a gas station
The problems of markets can be addressed by:
A. guaranteed price matching. B. increasing the number of sellers in the market. C. imposing price ceilings. D. money-back guarantees.