Jose consumes cakes and ale. His demand function for cakes is qc = m - 30pc +20pa, where m is his income, Pa is the pric

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Jose Consumes Cakes And Ale His Demand Function For Cakes Is Qc M 30pc 20pa Where M Is His Income Pa Is The Pric 1 (323.34 KiB) Viewed 33 times

Jose consumes cakes and ale. His demand function for cakes is qc = m - 30pc +20pa, where m is his income, Pa is the price of ale, pc is the price of cakes, and qc is his consumption of cakes. Jose's income is $100, and the price of ale is $1 per unit. (a) Is ale a substitute for cakes or a complement? Explain. (b) Write an equation for Jose's demand function for cakes where income and the price of ale are held fixed at $100 and $1. Draw Jose's demand curve for cakes. (c) Write an equation for Jose's inverse demand function for cakes where income is $100 and the price of ale remains at $1.