the two products are unrelated, so the cross-price elasticity of these goods is
ID: 1092771 • Letter: T
Question
the two products are unrelated, so the cross-price elasticity of these goods is zero.
the cross-price elasticity of these goods is positive.
the income elasticity of the two goods is positive.
the cross-price elasticity of these two goods is negative.
the two products are unrelated, so the cross-price elasticity of these goods is zero.
the cross-price elasticity of these goods is positive.
the income elasticity of the two goods is positive.
the cross-price elasticity of these two goods is negative.
Explanation / Answer
The demand curve for bread will shift to the left (decrease) due to the price of butter increasing (we will buy less butter and therefore also less bread since they are complements) and then there will be another shift in the demand curve for bread (on the same graph) - it will shift to the right (since buy definition a normal good is a good we buy more of if our income goes up). So you will shift the curve to the left and to the right.
the cross-price elasticity of these two goods is negative.
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