-The demand for pizzas in a large town is written as: Qd = 120 - 10P + 5Pb - 0.5Ps - 10Y,where Qd is the quantity demanded,P is the price,Pb is the price of buritos,Ps is the price of soft drinks sold in the pizza restaurants,and Y is personal income per month (in thousand dollars).We can conclude that burritos and pizzas are
A) substitutes.
B) normal goods.
C) complements.
D) unrelated.

Question

-The demand for pizzas in a large town is written as: Qd = 120 - 10P + 5Pb - 0.5Ps - 10Y,where Qd is the quantity demanded,P is the price,Pb is the price of buritos,Ps is the price of soft drinks sold in the pizza restaurants,and Y is personal income per month (in thousand dollars).We can conclude that burritos and pizzas are
A) substitutes. 
B) normal goods. 
C) complements. 
D) unrelated.

Quizplus · Accepted Answer

The positive coefficient of Pb (5) in the demand equation indicates that as the price of burritos increases, the demand for pizzas also increases, suggesting that burritos and pizzas are substitutes.

-The Demand for Pizzas in a Large Town Is Written