You are the manager of a local tea shop called Unicorn Tears. You have the following information about the daily demand for your business
Qdtea = 50 − 5ptea + 4pcoffee + 6I − 3psugar
Where I is income. Suppose that the current equilibrium price and quantity are ptea*=3 and Qtea*=90. Which of the following statements is true?
A. Tea is an inferior good.
B. Tea and coffee are demand complements.
C. Demand for tea is inelastic.
D. Demand for tea is elastic.
E. Tea and sugar are demand substitutes.
