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Posts: 180
2 months ago

Question 1.

The cross price elasticity of demand between two goods is 2. We may conclude that

• the two goods are very complementary and probably are sold together.

• the demand for one of the goods is likely to be fairly elastic and the demand for the other good is likely to be fairly inelastic.

• the demand for each of the goods is likely to be very elastic.

• the two goods are poor substitutes for each other.

Question 2.

The cross-price elasticity of demand of products "A" and "B" is zero. This implies that "A" and "B" are

• substitute products.

• unique goods, as the price elasticity of demand for one of them is zero.

• independent products.

• complementary products.
Source  Download
Economics Today: The Micro View
Edition: 19th
Author:
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Answer verified by a subject expert
wrote...
Posts: 189
2 months ago
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Answer 1

the demand for each of the goods is likely to be very elastic.

Answer 2

independent products.
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2 months ago
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