In the demand equation log(Q) = a - b log(P) + b₂ log(P₂) + c log(I), where P is the price of the good in question, P₂ is the price of a second good and I is income, the second good must be:

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Quizplus · Accepted Answer

In the demand equation, the price of the second good is included in the equation, which indicates that it is a substitute for the good in question. As the price of the substitute increases, the quantity demanded of the good in question also increases, leading to a positive coefficient for the variable.

In the Demand Equation Log(Q) = a - B Log(P)