Introduction to Economics 1 Deneme Sınavı Sorusu #1275582
For which of these goods, the cross-price elasticity of demand is negative?
Butter and margarine. |
Tea and coffee. |
Computers and software products. |
Print books and e-books. |
Beef and chicken. |
For complement goods, the cross-price elasticity of demand is negative because a price increase in good X causes the quantity demanded of good Y to decrease. For example, computers and software products are complements since one cannot be used without the other. An increase in the price of computers causes a decrease in the quantity demanded for software products. For Substitute goods, the cross-price elasticity of demand is positive since the price increase of good X causes the quantity demanded of good Y to increase. Butter and margarine, tea and coffee, print books and e-books, beef and chicken are all examples of substitute goods.
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