Question
The demand function for a pair of a popular new brand of athletic shoe has been estimated to be as follows: Q d = 500
The demand function for a pair of a popular new brand of athletic shoe has been estimated to be as follows:
Qd = 500 - 2.5*Po + 1.5*Pc + .5*I + .02*A
Where Po is the own price of the pair of shoes, Pc is the price of a pair of close competitor's shoes, I is the average income in the area measured in thousands of dollars, and A is spending on advertising measured in millions of dollars. At the current time, the new shoes are priced at $125 a pair, a pair of the competitor's shoe is selling for $100, I = 37.5 and A = 5.
Based on the coefficient of the price of the competitor's shoes, the 2 types of shoes are best described as .
unrelated
substitutes
complements
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