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A coffee roaster sells two kinds of coffee - its "regular" brand and its "gourmet" variety....

A coffee roaster sells two kinds of coffee - its "regular" brand and its "gourmet" variety. The regional demand for the regular coffee was found to be QD = 5000 - 20 PR - 3 M + 5 PG where PR is the price of regular coffee, M is income in the region, and PG is the price of gourmet coffee. What can we determine from this information? A. Regular coffee is an inferior good, and is a substitute for gourmet coffee. B. Regular coffee is a normal good, and is a substitute for gourmet coffee. C. Regular coffee is an inferior good, and is a complement for gourmet coffee. D. Regular coffee is a normal good, and is a complement for gourmet coffee.

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Answer: (A) regular coffee is an inferior good and a substitute for gourmet coffee.

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