If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price elasticity of demand? a) 0. b) 1. c) -1. d) All of the above could be the value of cross price elasticity of demand.

If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price elasticity of demand? a) 0. b) 1. c) -1. d) All of the above could be the value of cross price elasticity of demand.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 1QR

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Concept explainers

Elasticity of Demand and Supply

The elasticity of demand and supply are two important concepts of microeconomics. The elasticity of demand measures the responsiveness of consumers’ demands to the price change, changes in income of consumers, and changes in the price of the related goods. Similarly, the elasticity of supply refers to the proportionate change in the quantity supplied due to the proportionate change in the price. In other words, it can be said that elasticity of supply measures how the quantity of supply changes when the price changes of that particular product.

Question

If goods X and Y are COMPLEMENTS, the which of the following could be the value of cross price elasticity of demand?
a) 0.
b) 1.
c) -1.
d) All of the above could be the value of cross price elasticity of demand.

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