Solve i,ii, iii iii. If electric vehicles areconsidered as close substitutes offuel cell vehicles (fuel cars) thenwhich of the following is true ?Demand of fuel cars is inelasticO Not enough information to sayNo effect on demand elasticityDemand of fuel cars is elastic Interestingly, the demand in the car marketexperienced a decline at the same time.i. What can you say about thecross-elasticity of demandbetween petrol and car markets?XED > 11 > XED > 00> XEDXED = 0ii. What type of goods are petroland gas if XED = 0.4?Complementary and High responsivenessComplementary and Low responsivenessNeutralSubstitute and High responsivenessSubstitute and low responsiveness

(iii) The elasticity of demand measures the responsiveness of change in quantity demand to change in…

Answered: iii. If electric vehicles are…

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iii. If electric vehicles are considered as close substitutes of fuel cell vehicles (fuel cars) then

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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Question

Solve i,ii, iii

iii. If electric vehicles are
considered as close substitutes of
fuel cell vehicles (fuel cars) then
which of the following is true ?
Demand of fuel cars is inelastic
O Not enough information to say
No effect on demand elasticity
Demand of fuel cars is elastic

Interestingly, the demand in the car market
experienced a decline at the same time.
i. What can you say about the
cross-elasticity of demand
between petrol and car markets?
XED > 1
1 > XED > 0
0> XED
XED = 0
ii. What type of goods are petrol
and gas if XED = 0.4?
Complementary and High responsiveness
Complementary and Low responsiveness
Neutral
Substitute and High responsiveness
Substitute and low responsiveness

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