The price of good X falls by 15 %. As a result, the demand for good Y rises by 30 %. a) What is the cross-elasticity of demand for good Y with respect to good X? b) Are the two goods substitutes or complements? Explain briefly.

The price of good X falls by 15 %. As a result, the demand for good Y rises by 30 %. a) What is the cross-elasticity of demand for good Y with respect to good X? b) Are the two goods substitutes or complements? Explain briefly.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 2WNG: As the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to...

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Q9. The price of good X falls by 15 %. As a result, the demand for good Y rises by 30 %.

a) What is the cross-elasticity of demand for good Y with respect to good X?
b) Are the two goods substitutes or complements? Explain briefly.

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