If the Cross-Price Elasticity of Demand Between Good X and Good

Multiple Choice

If the cross-price elasticity of demand between good x and good y is 0.4, then

A) the demand for good x is highly responsive to changes in the price of good y
B) a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x
C) a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y
D) good x and good y are complements
E) good x is a normal good and good y is an inferior good