Q. 10 The value of cross price elastic... [FREE SOLUTION]

Chapter 19: Q. 10 (page 434)

The value of cross price elasticity of demand between goods $X$ and $Y$ is $1.25$ , while the cross price elasticity of demand between goods $X$ and $Z$ is $- 2.0$ . Characterize $X$ and $Y$ and $X$ and $Z$ as substitutes or complements.

Short Answer

Expert verified

The goods $X$ and $Y$ are substitute goods. and the goods $X$ and $Z$ are complementary goods.

Step by step solution

Introduction

The goods are deemed substitutes if the cross price elasticity of demand between them is positive. When the price of one commodity rises, demand for other goods rises as well. As a result, the goods $X$ and $Y$ are interchangeable.

Explanation

When the cross price elasticity of demand between two items is negative, the goods are said to be complimentary.

Simultaneously, complementary things are purchased. When the price of one commodity rises, demand for other goods falls. As a result, the items $X$ and $Z$ are complementary.

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The value of cross price elasticity of demand between goods $X$ and $Y$ is $1.25$ , while the cross price elasticity of demand between goods $X$ and $Z$ is $- 2.0$ . Characterize $X$ and $Y$ and $X$ and $Z$ as substitutes or complements.

Short Answer

Step by step solution

Introduction

Explanation

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91影视

The value of cross price elasticity of demand between goods Xand Yis 1.25, while the cross price elasticity of demand between goods Xand Zis -2.0. Characterize Xand Yand Xand Zas substitutes or complements.

Short Answer

Step by step solution

Introduction

Explanation

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Most popular questions from this chapter

Recommended explanations on Economics Textbooks

Taxation Economics

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The value of cross price elasticity of demand between goods $X$ and $Y$ is $1.25$ , while the cross price elasticity of demand between goods $X$ and $Z$ is $- 2.0$ . Characterize $X$ and $Y$ and $X$ and $Z$ as substitutes or complements.