Asked by Matthew Eskender on Apr 24, 2024

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Demand for Barbara Streisand CDs is equal to Qs  P2.50sI1.80P0.60c, where Qs is the number of CDs, Ps 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 substitutes.
C) are complements.
D) have diminishing returns to scale.
E) are not as good as the original 8-track tapes.

Barbara Streisand CDs

Physical compact discs containing music recorded by the American singer, actress, and filmmaker Barbara Streisand.

Complements

Goods that are often consumed together, such that an increase in demand for one leads to an increase in demand for the other.

Substitutes

Goods or services that can replace each other in use or consumption, such that an increase in the price of one leads to an increase in demand for the other.

  • Understand the concept of complementary and substitute goods in consumer preferences.
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SA
Samer AlanbakiMay 02, 2024
Final Answer :
B
Explanation :
The demand equation shows that as the price of Karen Carpenter CDs (a potential substitute) increases, the demand for Barbara Streisand CDs increases, indicating that they are substitutes.