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Recommended textbook solutions Krugman's Economics for AP2nd EditionDavid Anderson, Margaret Ray 1,042 solutions Principles of Economics8th EditionN. Gregory Mankiw 1,333 solutions Principles of Microeconomics8th EditionN. Gregory Mankiw 889 solutions Essentials of Investments7th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 425 solutions What can be said about goods X and Y if the cross price elasticity between X and Y is positive?We determine whether goods are complements or substitutes based on cross price elasticity - if the cross price elasticity is positive the goods are substitutes, and if the cross price elasticity are negative the goods are complements.
How do you know if cross price elasticity is positive or negative?The cross elasticity of demand for substitute goods is always positive because the demand for one good increases when the price for the substitute good increases. Alternatively, the cross elasticity of demand for complementary goods is negative.
When cross elasticity between x and y is greater than zero or positive x and y are?The correct option is: a.
A cross-price elasticity greater than zero implies a positive cross-price elasticity. For substitute goods, the cross-price elasticity of demand is always positive.
What is the significance of a positive cross elasticity coefficient between products X and Y?A positive cross price elasticity between two goods implies that an increase in price of one good leads to an increase in the demand for the other good. A higher cross price elasticity implies a higher substitutability.
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What can be said about goods X and Y if the cross price elasticity between X and Y is negative multiple choice question?
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