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    Question

    In economic terminology, to assess the relationship

    between complements a battery and a car you should find out the _________ that generally is __________ .
    A price elasticity, positive Correct Answer Incorrect Answer
    B cross price elasticity, negative Correct Answer Incorrect Answer
    C price elasticity, negative Correct Answer Incorrect Answer
    D cross price elasticity, positive Correct Answer Incorrect Answer

    Solution

    Cross-price elasticity measures the responsiveness of the demand for one good to a change in the price of another good. For complementary goods (like cars and batteries), an increase in the price of one (e.g., cars) leads to a decrease in the demand for the other (e.g., batteries). Therefore, their cross-price elasticity of demand is negative.

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