Demand for Barbara Streisand CDs is equal to Q_s = P^1.70_sI^2.20P^1.80_c, where Qs is the number of CDs, P_s is the price of a Streisand CD, I is per capita income, and Pc is the price of a Karen Carpenter CD.Streisand and Carpenter CDs A)are inferior goods. B)are complements. C)are substitutes. D)have diminishing returns to scale. E)are not as good as the original 8-track tapes.

Question

Quizplus · Accepted Answer

The equation shows that the demand for Streisand CDs depends on their own price, as well as the price of a substitute, which is the Karen Carpenter CD. This suggests that Streisand and Carpenter CDs are substitutes, as an increase in the price of one would lead to an increase in demand for the other.

Demand for Barbara Streisand CDs Is Equal to Qs =

Demand for Barbara Streisand CDs Is Equal to Q_s =