If a change of 15% in price of good X, results in a change in demand for good Y of 5%, then: (a) The cross-price elasticity of demand is 1/3 and the goods are substitutes (b) The cross-price elasticity of demand is 3 and the goods are substitutes (c) The cross-price elasticity of demand is 1/3 and the goods are complements (d) The cross-price elasticity of demand is 3 and the goods are complements (e) None of the above is true
If a change of 15% in price of good X, results in a change in demand for good Y of 5%, then: (a) The cross-price elasticity of demand is 1/3 and the goods are substitutes (b) The cross-price elasticity of demand is 3 and the goods are substitutes (c) The cross-price elasticity of demand is 1/3 and the goods are complements (d) The cross-price elasticity of demand is 3 and the goods are complements (e) None of the above is true
Chapter20: Elasticity: Demand And Supply
Section: Chapter Questions
Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...
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13. If a change of 15% in price of good X, results in a change in demand for good Y of 5%,
then:
(a) The cross-price
(b) The cross-price elasticity of demand is 3 and the goods are substitutes
(c) The cross-price elasticity of demand is 1/3 and the goods are complements
(d) The cross-price elasticity of demand is 3 and the goods are complements
(e) None of the above is true
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