The demand for marijuana is given by QMd =a−bPM−cPA−I where QMd is the demand for marijuana,...

The demand for marijuana is given by
QMd =a−bPM−cPA−I

where QMd is the demand for marijuana, PM is the price of marijuana, PA is the price of alcohol, and I is the income. a, b, c > 0

a. Indicate whether alcohol is substitute or complement for marijuana. Why?

b. Is marijuana an inferior or a normal good? Why?

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Expert Solution

Rahul Sunny answered 2 weeks ago

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