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: Q_A = 120 - 3.5 P_A - 6P_B
Q_B = 100 - 2P_B + 3P_C
Q_C = 1500 - 0.5P_C.
Based on these demand curves,which of the following pairs of goods are known to be complements?

Question

Quizplus · Accepted Answer

Goods A and B are complements because the coefficient of the price of good B in the demand for good A is negative (-6), which implies an inverse relationship between the quantity demanded of good A and the price of good B. However, there is no complementary relationship between goods B and C or goods A and C, as the coefficients of the prices of these goods in each other's demand functions are positive or zero.

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