Asked by
Dayanary Portillo
on Nov 04, 2024
Verified
If two products are substitutes, the ________ elasticity of demand is ________.
A) income; positive
B) income; negative
C) cross-price; positive
D) cross-price; negative
Cross-price Elasticity
A measure of how the quantity demanded of one good changes in response to a change in the price of another good.
Substitutes
Goods or services that can be used in place of each other, having the capability to satisfy similar needs or desires.
Demand
The quantity of a good or service that consumers are willing and able to purchase at various price points, at a given time.
- Comprehend the principle of elasticity within economic contexts, encompassing price elasticity of demand, income elasticity, and cross-price elasticity.
- Distinguish the traits of different types of goods (including normal, inferior, substitutes, and complements) by examining their income and cross-price elasticity.
Verified Answer
JM
Learning Objectives
- Comprehend the principle of elasticity within economic contexts, encompassing price elasticity of demand, income elasticity, and cross-price elasticity.
- Distinguish the traits of different types of goods (including normal, inferior, substitutes, and complements) by examining their income and cross-price elasticity.
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