Answered

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Imagine the demand function for a good takes the following form:
QD = 200 - 2p + 4p1 - 3p2
Assume p1 = 10 and p2 = 5.
The supply function is
Qs = -75 + 4p.
In the demand function, looking at the coefficients for P_1 and p_2, which is the complement good and which is the substitute good (call them good 1 and good 2)? Briefly explain your answer.

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