Introduction to Economics 1 Deneme Sınavı Sorusu #1278523
Which of the following is true?
Cross-price elasticity of demand is positive for complement goods |
Cross-price elasticity of demand is greater than zero for complement goods |
Cross-price elasticity of demand is smaller than zero for substitute goods |
Cross-price elasticity of demand is negative for substitute goods |
Cross-price elasticity of demand is positive for substitute goods |
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.
For substitutes, Cross-price elasticity of demand is greater than zero.
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 complements,Cross-price elasticity of demand is less than zero.
Answer is E.
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