Question

Suppose that when the price of good A rises from $18 to $20, the quantity demanded...

Suppose that when the price of good A rises from $18 to $20, the quantity demanded of good B falls from 30 units to 20 units.

Using the midpoint method, the cross-price elasticity of demand is

Select one: a. -0.26, where goods A and B are complements.

b. -0.26, where goods A and B are substitutes.

c. -3.8, where goods A and B are complements.

d. -3.8, where goods A and B are substitutes.

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Answer #1

OPTION C

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