Question

Cross-price elasticity of demand is a. negative for complementary goods. b. negative for substitute goods. c....

Cross-price elasticity of demand is

a. negative for complementary goods.

b. negative for substitute goods.

c. positive for general goods.

d. unitary for secondary goods.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Cross price elasticity of demand is given by the percentage in quantity demanded due to a percentage change in the price of its related goods.

eC = % change in quantity demanded / % change in price of related goods

For complementary goods, ec < 0 which means that % change in quantity demanded is less than % change in price of related goods.

For substitute goods, ec > 0 which means that % change in quantity demanded is greater than % change in price of related goods.

The answers is (a) negative for complementary goods.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If goods X and Y are substitute goods, then the cross-price elasticity of the price of...
If goods X and Y are substitute goods, then the cross-price elasticity of the price of good Y on the demand for good X is: Select one: a. positive b. zero c. undefined d. negative
The price elasticity of demand uses the absolute value because it is sometimes negative or always...
The price elasticity of demand uses the absolute value because it is sometimes negative or always negative .The income and cross elasticities of demand do not use the absolute value because they can be negative only, positive only or positive or negative The income elasticity of demand is positive for a normal or inferior good and negative for an inferior or normal good. The​ cross-price elasticity of demand is positive for complementary or substitute goods and negative for complementary or...
3.Factors that affect a product’s price elasticity of demand are A. availability of close substitutes. B....
3.Factors that affect a product’s price elasticity of demand are A. availability of close substitutes. B. passage of time. C. necessity versus luxury. D. definition of the market. E. All of the above are correct. 4. If a price increase causes a decrease in total revenues (total expenditures), then the product is considered to be A. price elastic. B. price inelastic. C. unitary elastic. D. All of the above are correct. E.None of the above are correct. 5.Price elasticity of...
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods...
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods b. positive for complements c. positive for substitutes d. positive for normal goods e. never positive
40) The cross elasticity of demand for butter and margarine is likely to be A) positive...
40) The cross elasticity of demand for butter and margarine is likely to be A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods. 41) If an increase in the price of green ketchup increases the demand for red ketchup, then A) red and green ketchup are substitutes. B) red and green ketchup are normal goods. C) the cross...
1) Using the midpoint method, the price elasticity of demand is determined to be about 0.85....
1) Using the midpoint method, the price elasticity of demand is determined to be about 0.85. If there is a 10% decrease in the quantity demanded of the product then what effect would this have on the price of the product? A decrease in the price of the product from $8.50 to $10 A 11.8% increase in the price of the product An increase in the price of the product from $8.50 to $10 2)The ________ is negative for complementary...
2. Calculate price elasticity of demand, cross price elasticity of demand and income price elasticity of...
2. Calculate price elasticity of demand, cross price elasticity of demand and income price elasticity of demand. Then indicate whether the alternative good is a complement or substitute. P =10, PA=20, and I =100. a) Q = 500 - 3P + 4PA + I (I stands for income) b) Q = 100 - 0.1P - 0.5PA - 0.2I
The pair of items that is most likely to have a negative cross-price elasticity of demand...
The pair of items that is most likely to have a negative cross-price elasticity of demand is: A. mustard and aspirin. B. cashews and peanuts. C. coffee and tea. D. hamburgers and ketchup.
(60)A perfectly inelastic demand curve has an elasticity coefficient of: (a)1 (b)0.25 (c)∞ (d)None of the...
(60)A perfectly inelastic demand curve has an elasticity coefficient of: (a)1 (b)0.25 (c)∞ (d)None of the above Akal mn wahed Extra Credit Questions-Optional (61)If the percentage change in the quantity supplied of a good is less than the percentage change in price, price elasticity of supply is: (a)Inelastic (b)Perfectly inelastic (c)Elastic (d)Unitary elastic (62)If the percentage change in the quantity demanded of a good is equal to the percentage change in price, price elasticity of demand is: (a)Inelastic (b)Perfectly inelastic...
When the price of a particular good increases demand for normal goods rises. demand for complementary...
When the price of a particular good increases demand for normal goods rises. demand for complementary goods falls. demand for substitute goods falls.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT