Author Question: Suppose the cross elasticity of demand between two goods, X and Y, is negative. If the price of X ... (Read 48 times)

najmarocks25 · **on:** Oct 12, 2022

Question 1

If two goods, X and Y, have a positive cross elasticity of demand, then we know that they
◦ are both normal goods.
◦ each have a price elasticity greater than one.
◦ are substitutes.
◦ are complements.
◦ are both inferior goods.

Question 2

Suppose the cross elasticity of demand between two goods, X and Y, is negative. If the price of X decreases, the quantity demanded will
◦ rise for X and fall for Y.
◦ fall for X and rise for Y.
◦ fall for both goods.
◦ rise for both goods.
◦ not change.

jbsuccess1 · **Reply #1 on:** Oct 12, 2022

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