Multiple Choice
Suppose that the cross elasticity of demand for Product A and Product B is -1.6 and the price of Product A decreased by 20 per cent.What will happen to the quantity demanded of Product B?
A) It will increase by 3.2%.
B) It will increase by 32%.
C) It will decrease by 3.2%.
D) It will decrease by 32%.
E) The quantity will be unaffected but the price of Product B will increase by 32%.
Correct Answer:
Verified
Correct Answer:
Verified
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