Question

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

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Homework Answers

Answer #1

Answer:Option 'C'(positive for substitutes)

Justification:

The cross price elasticity of demand (or)The cross-value versatility of interest quantifies the adjustment popular for one great because of an adjustment in cost of another great.

●Substitute goods or Substitute merchandise have a positive cross-cost flexibility: as the cost of one great expands, the interest for the other great increments.

●Complementary goods or Correlative products have a negative cross-cost versatility: as the cost of one great expands, the interest for the subsequent great reductions.

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