Question

For goods x1 and x2 with prices P1 and P2, if dx1/dP2 is positive then,

A X1 and X2 are substitutes Correct Answer Incorrect Answer
B X1 and X2 are complements Correct Answer Incorrect Answer
C X1 and X2 are bads Correct Answer Incorrect Answer
D X1 and X2 are neutral Correct Answer Incorrect Answer
E X1 and X2 are not related Correct Answer Incorrect Answer

Solution

For substitutes, if price of one good increase the demand for the other good increases and vice-versa.

Practice Next
×
×