Are these answers correct? The question is attached as a photo x) This statement is true. If the cross elasticity of demand of two goods is positive, that is, it is greater than zero, it indicates that the two goods are substitutes for each other and they demand will be elastic. y) This is the correct answer. If the cross elasticity of demand for two goods is greater than zero it means that the goods are substitute to each other and their demand is elastic, therefore, any change in price will have a greater change in the quantity demanded. z) This statement is true. If the cross elasticity of demand for two goods is negative, that is, less than zero it means that the goods are complementary to each other and their demand will be elastic meaning that any change in the price will lead to less quantity demanded of both the goods
Are these answers correct? The question is attached as a photo
x) This statement is true. If the cross elasticity of
y) This is the correct answer. If the cross elasticity of demand for two goods is greater than zero it means that the goods are substitute to each other and their demand is elastic, therefore, any change in price will have a greater change in the quantity demanded.
z) This statement is true. If the cross elasticity of demand for two goods is negative, that is, less than zero it means that the goods are complementary to each other and their demand will be elastic meaning that any change in the price will lead to less quantity demanded of both the goods.
Step by step
Solved in 3 steps
