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Problem

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question

How will the cross elasticity of demand differ, depending upon whether product A is a complement of or substitute for product B?

category

economics

options

  1. The cross elasticity of demand for A with respect to the price of B will be positive only if both goods are luxury items.
  2. The cross elasticity of demand for A will be infinite if good B's price changes.
  3. The cross elasticity of demand for A with respect to the price of B will be zero
  4. The cross elasticity of demand for A with respect to the price of B will always be positive
  5. The cross elasticity of demand for A with respect to the price of B will be positive if A is a normal good and B is an inferior good.
  6. If good A is a complement of good B, the cross elasticity of demand for A with respect to the price of B will be negative. If good A is a substitute for good B, the cross elasticity of demand for A with respect to the price of B will be positive.
  7. The cross elasticity of demand for A with respect to the price of B will be positive if A and B are unrelated goods.
  8. The cross elasticity of demand for A with respect to the price of B will be the same regardless of whether A is a complement or substitute for B.
  9. The cross elasticity of demand for A with respect to the price of B will always be negative
  10. If good A is a complement of good B, the cross elasticity of demand for A with respect to the price of B will be positive. If good A is a substitute for good B, the cross elasticity of demand for A with respect to the price of B will be negative.

src

stemez-Economics

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