PA + 3PB and demand for product B… Show more Assume that d

PA + 3PB and demand for product B… Show more Assume that d

PA + 3PB and demand for product B… Show more Assume that demand for product A can be expressed as QA = 500 – PA + 3PB and demand for product B can be expressed as QB = 300 – 2PB + PA. Currently, market prices and quantities for these products are PA = 5, PB= 2, QA = 481, and QB = 301. a. Suppose the price of product B increases to 3. What happens to quantity demanded of both products? b. Calculate the arc cross-elasticity between product A and product B using prices for product B of 2 and 3. c. Are these goods substitutes or complements? Answers are here on Chegg under text book solutions but I’m getting different answers and it only answers question A; it doesn’t explain how to come to the conclusion. • Show less

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