An economic consultancy models the weekly demand for premium organic coffee (QcQ_cQc, in thousands of cups) in a metropolitan area using the following demand function:
Qc=120−4Pc+0.05Y−2Pt Q_c = 120 - 4P_c + 0.05Y - 2P_t Qc=120−4Pc+0.05Y−2Ptwhere Pc P_c\,Pc is the price of a cup of coffee (in £), Y Y\,Y is the average weekly disposable income of consumers (in £), and Pt P_t\,Pt is the price of a pastry (in £) sold at accompanying bakeries.
Based on this demand function, which of the following statements is correct?
Premium organic coffee is an inferior good, and coffee and pastries are complements.
Premium organic coffee is a normal good, and coffee and pastries are substitutes.
Premium organic coffee is a normal good, and coffee and pastries are complements.
Premium organic coffee is an inferior good, and coffee and pastries are substitutes.
