Re: Q 43 and 23 DSE 2011

Posted by s on Jun 12, 2012; 3:57pm
URL: http://discussion-forum.276.s1.nabble.com/Q-43-and-23-DSE-2011-tp7577660p7577670.html

Q.43

M=P_A*A+P_B*B...(1)

when P_A=10, B=3, and solve 1 to get A=4

when P_A=20, A=5 solve 1 to get B=0

thus as P_A rises demand for A rises which is a characteristic of a giffen good and giffen => inferior good
also B will be a complement of A when D(demand for B)/D(P_A) <0 which holds here ..so (D)