Suppose That the Demand Curves for Goods A, B, and C

question 34

Multiple Choice

Suppose that the demand curves for goods A, B, and C have the following functional forms:, where Q denotes quantity demanded and P denotes price:
QA = 120 - 3.5 PA - 6PB QB = 100 - 2PB + 3PC QC = 1500 - 0.5PC.
Based on these demand curves, which of the following pairs of goods are known to be complements?

• A) B and C
• B) A and C
• C) A and B
• D) A and C, and B and C
• E) none of the pairs are complements

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Definitions:

Testator

One who makes a valid will.

Maker Of A Will

Person who creates a legal document that outlines how their property should be distributed upon their death.

Perfect Substitutes

Goods or services that can be used in place of each other with no loss of utility to the consumer.

Perfect Complements

Two goods for which the Marginal Rate of Substitution (MRS) is zero or infinite; the indifference curves are shaped as right angles.