Consider a demand function of the form: Qd= a-bP +cY + dPs-ePc ;

whereQdis quantity demanded of a good during aperiod,P is the price of thegood, Y is consumerincomes,Psis the price of a substitute for thegood, andPcis the price of a complementary good.

State whether each of the following statements is true orfalse:

The good priced atPsis a substitute good for the good in question because the quantity demanded falls asPs

rises.

Select one:

True

False

Consider a demand function of the form: Qd= a-bP +cY + dPs-ePc ;

whereQdis quantity demanded of a good during aperiod,P is the price of thegood, Y is consumerincomes,Psis the price of a substitute for thegood, andPcis the price of a complementary good.

State whether each of the following statements is true orfalse:

The good priced atPcis a complementary good for the good in question because the quantity demanded falls as

Pcrises.

Select one:

True

False