Question

The cross-price elasticity of demand between goods X and Y

		measures the responsiveness of the quantity of X demanded to changes in the price of Y.
		is the percentage change in the price of Y divided by the percentage change in the quantity of X demanded.
		is greater than zero if X and Y are substitutes.
		both a and c
		all of the above

Answer 1

Ans. c) Both a and c

The cross-price elasticity of demand between goods X and Y measures the responsiveness of the quantity of X demanded to changes in the price of Y. In other words, it refers to that the percentage change in the quantity of good X demanded divided by the percentage change in the price of good Y. when price of good Y increases, the demand for good X increases and when price of good Y decreases, demand for good X decreases then both goods are substitute and cross-price elasticity between good X and good Y is greater than zero