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    Blawy's Avatar
    Blawy Posts: 3, Reputation: 1
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    #1

    Nov 10, 2014, 11:44 AM
    What is the relationship between product X and Y in this demand curve? Substitute or
    What is the relationship between product X and Y in this demand curve?
    Substitute or complement? Qdx = 80 - 3Px + 2Py - 10I
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Nov 10, 2014, 12:04 PM
    I won't give you the answer, but I will help you through it so you can solve it yourself. From the equation if the price of y increases does Qx increase or decrease? What would you expect Qx to do if x is a complement of y and y's price increases? How about if x is a substitute for y? Please answer these and we'll be happy to check your answers.
    Blawy's Avatar
    Blawy Posts: 3, Reputation: 1
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    #3

    Nov 10, 2014, 12:27 PM
    If x is a complement of y and y's price increases, Qx will decrease? If x is a substitute of y, then Qx will increase.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    Nov 10, 2014, 12:48 PM
    Quote Originally Posted by Blawy View Post
    If x is a complement of y and y's price increases, Qx will decrease? If x is a substitute of y, then Qx will increase.
    Seems logical. So, what's your answer - is x a complement or substitute for y?
    Blawy's Avatar
    Blawy Posts: 3, Reputation: 1
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    #5

    Nov 10, 2014, 12:52 PM
    Complement?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #6

    Nov 10, 2014, 12:56 PM
    Are you guessing? Have you figured out what happens to Qx when Py increases?

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