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The demand for coal in the international market is given by the equation:
Qc = 100 - 8Pc - 0.5Pz
Where Pc is the price of coal, and
Pz = $12 is the price of related resource.
a. Write the reduced form equation.
b. Calculate the elasticity of dmand when the price of coal is Pc = $7.
c. What is the cross-price elasticity of demand of coal and the related resource?
d. Are the two substitutes or complements?
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