Suppose the demand functions for two products are q1 = f(p1, p2) and q2 = g(p1, p2) where p1, p2, q1, and q2 are the prices (in dollars) and quantities for products 1 and 2. Consider the four partial derivatives ∂q1/∂p1, ∂q1/∂p2, ∂q2/∂p1 and ∂q2/∂p2, State the sign of each of these partial derivatives if: (a) the products are complementary goods (b) the products are substitute goods.
Suppose the demand functions for two products are q1 = f(p1, p2) and q2 = g(p1, p2) where p1, p2, q1, and q2 are the prices (in dollars) and quantities for products 1 and 2. Consider the four partial derivatives ∂q1/∂p1, ∂q1/∂p2, ∂q2/∂p1 and ∂q2/∂p2, State the sign of each of these partial derivatives if: (a) the products are complementary goods (b) the products are substitute goods.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose the demand functions for two products are q1 = f(p1, p2) and q2 = g(p1, p2) where
p1, p2, q1, and q2 are the prices (in dollars) and quantities for products 1 and 2. Consider the
four partial derivatives
∂q1/∂p1,
∂q1/∂p2,
∂q2/∂p1
and ∂q2/∂p2,
State the sign of each of these partial derivatives if:
(a) the products are complementary goods
(b) the products are substitute goods.
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