In the diagram above, suppose the consumer's income is $25,200, price of X is $…
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In the diagram above, suppose the consumer's income is $25,200, price of X is $1575 and price of Y is $700.
a) What is the optimal quantities of X and Y?
X =
8
Y =
18
b) If price of Y increases to $1680, are goods X and Y normal or inferior?
X is
normal
Y is
normal
c) Are goods X and Y complements or substitutes?
X and Y are
complements