Last month, sellers of good Y took in $150 and sold 50 units of good Y. This month sellers of good Y raised their price, took in $160 and sold 40 units of good Y. At the same time, the price of good X stayed the same, but sales of good X decreased from 40 units to 20 units. What can we conclude about goods X and Y? a. They are substitutes, and have a cross-price elasticity of 0.43. b. They are complements, and have a cross-price elasticity of 0.43. c. They are substitutes, and have a cross-price elasticity of 2.33. d. They are complements, and have a cross-price elasticity of 2.33.

Complement goods: Two goods are said to be complements or complementary goods if the rise in the…

Answered: Last month, sellers of good Y took in…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Last month, sellers of good Y took in $150 and sold 50 units of good Y. This month sellers of good Y raised their price, took in $160 and sold 40 units of good Y. At the same time, the price of good X stayed the same, but sales of good X decreased from 40 units to 20 units. What can we conclude about goods X and Y?

	a.	They are substitutes, and have a cross-price elasticity of 0.43.
	b.	They are complements, and have a cross-price elasticity of 0.43.
	c.	They are substitutes, and have a cross-price elasticity of 2.33.
	d.	They are complements, and have a cross-price elasticity of 2.33.