Asked by
Vetri Selvan
on Oct 26, 2024
Verified
If your purchases of good A decrease from 11 units per year to 9 units per year when the price of good B increases from $8 to $12,all other things equal,for you,good A and good B are considered _____ goods.
A) inferior
B) luxury
C) substitute
D) complementary
Cross-Price Elasticity
A measure of how the quantity demanded of one good changes in response to a price change of another good.
Complementary Goods
Products or services that tend to be used together, where the consumption of one enhances the use of the other.
- Grasp the fundamentals of cross-price elasticity of demand and its application in examining the relationship between two items (whether substitutes or complements).
- Contrast substitutes and complements by inspecting their cross-price elasticity of demand indicators.
Verified Answer
LD
Learning Objectives
- Grasp the fundamentals of cross-price elasticity of demand and its application in examining the relationship between two items (whether substitutes or complements).
- Contrast substitutes and complements by inspecting their cross-price elasticity of demand indicators.