Two items which have a negative cross price elasticity of demand are referred to as
A. inferior goods.
B. complements.
C. substitutes.
D. luxury goods.
Answer: B
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Which of the following statements about price elasticity of demand is false?
A) The value of the price elasticity of demand along a downward-sloping demand curve is always negative. B) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic. C) The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope. D) A linear downward-sloping demand curve has a varying price elasticity coefficient.
Pepsi One is a close substitute for Diet Coke. When Pepsi introduced Pepsi One, the price elasticity of demand for Diet Coke ________ and Coke's ability to raise revenues through price increases ________.
A. decreased; was reduced B. had no effect; was reduced C. increased; was reduced D. increased; increased
The market clearing price is
A. the price which leaves an excess quantity supplied. B. the lowest price at which a positive quantity supplied exists. C. the price which leaves an excess quantity demanded. D. the price which eliminates excess quantity supplied or excess quantity demanded.
When the total quantity of unsold new Tesla Model 3 vehicles increases from 40,000 to 45,000
A. the economy's level of consumption has increased. B. there is a decrease in aggregate output. C. the economy experiences an increase in inventory investment. D. the economy experiences a decrease in investment.