Asked by
Puseletso Mokgotho
on Dec 05, 2024
Verified
The price of pretzels increases and the demand for tortilla chips decreases,so we can assume that these two goods are:
A) unrelated.
B) inferior.
C) complementary.
D) substitutes.
Cross-Price Elasticity
A measure indicating how the demand for one good responds to a change in the price of another good, showing whether they are substitutes or complements.
Complementary Goods
Goods that are often used together so that the consumption of one increases the demand for the other.
- Acquire knowledge about the cross-price elasticity of demand and its role in establishing the linkage between two goods (substitutes or complements).
- Differentiate substitutes from complements by evaluating their cross-price elasticity of demand.
Verified Answer
UK
Learning Objectives
- Acquire knowledge about the cross-price elasticity of demand and its role in establishing the linkage between two goods (substitutes or complements).
- Differentiate substitutes from complements by evaluating their cross-price elasticity of demand.