If a 1 percent decrease in the price of product A brings about a 3 percent increase in the sales of product B, then:
a. products A and B are complementary.
b. the cross elasticity of demand between these two products is positive.
c. products A and B are substitutes.
d. the demand for these products is inelastic.
e. the total revenue earned from product A will decrease.
a
You might also like to view...
Use the figure below to answer the following question.
What is the amount of total surplus without the excise tax?
A. $100 B. $32 C. $4 D. $80
Recent housing reforms in Cuba should give homeowners ________ incentives to repair their homes and therefore ________ construction of new homes
A) more; decrease B) fewer; increase C) fewer; decrease D) more; increase
When the price of apples goes up
A) the quantity of apples demanded will decrease, ceteris paribus. B) the demand for apples will increase, ceteris paribus. C) the quantity of apples demanded will increase, ceteris paribus. D) the demand for apples will decrease, ceteris paribus.
In the short run, which are most important in determining changes in output?
A. Marginal cost and marginal revenue B. Total costs and revenue C. Average cost and average revenue D. Fixed costs