📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    An economist calculated the cross-price

    elasticity of demand for nicknacks and gizmos and got -0.5. What can she conclude about the relationship between these two goods based on this elasticity?
    A they are unrelated goods Correct Answer Incorrect Answer
    B they are substitutes Correct Answer Incorrect Answer
    C they are complements Correct Answer Incorrect Answer
    D they are normal goods Correct Answer Incorrect Answer

    Solution

    They are complements because cross-price elasticity is negative.

    Practice Next
    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call