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A Firm Sells Two Goods (X and Y)that Are Related

Question 30

Multiple Choice

A firm sells two goods (X and Y) that are related in consumption.The estimated inverse demand and cost functions are: PX=1050.5QX0.75QYPY=120QY0.5QXMCX=10+0.25QXMCY=16+0.5QY\begin{array} { l } P _ { X } = 105 - 0.5 Q _ { X } - 0.75 Q _ { Y } \\P _ { Y } = 120 - Q _ { Y } - 0.5 Q _ { X } \\M C _ { X } = 10 + 0.25 Q _ { X } \\M C _ { Y } = 16 + 0.5 Q _ { Y }\end{array}
Good X and Y are:


A) complements
B) substitutes
C) independent
D) normal
E) inferior

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