This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: An increase in the price of Product X leads to a decrease in demand for Product Y. The price ... (Read 276 times)

KimWrice

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
An increase in the price of Product X leads to a decrease in demand for Product Y. The price increase also increases the demand for Product Z, a related good. Discuss the relationship between these products.

Question 2

Will MPC plus MPS always equal one? Explain why or why not.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

popopong

  • Sr. Member
  • ****
  • Posts: 307
Reply #1 on: Jun 30, 2018
Answer to Question 1

Product X and Product Y: complements.
Product X and Product Z: substitutes.

Answer to Question 2

Yes, MPC plus MPS will always equal one. The reason is that there are only two things that an individual can do with income spend it or save it. As such, for each dollar of additional income, a certain percentage will be used for consumption and the remaining percentage will be devoted to saving.


KimWrice

  • Hero Member
  • *****
  • Posts: 579
Reply #2 on: Jun 30, 2018
Thank you :)


popopong

  • Sr. Member
  • ****
  • Posts: 307
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Cytomegalovirus affects nearly the same amount of newborns every year as Down syndrome.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Electrode placement for chest leads V1–V6. Electrode placement for chest leads V1–V6.
The population of Asia increases rapidly, the demand for food and water is also growing The population of Asia increases rapidly, the demand for food and water is also growing
Increase in Surface Area by Mechanical Weathering Increase in Surface Area by Mechanical Weathering
Find derivative using product rule Find derivative using product rule
The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ... The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ...
The phenotype of an organism is the product of interactions The phenotype of an organism is the product of interactions
Video: Effect of the environment on coat color in the Himalayan rabbit Animation

For a complete list of videos, visit our video library