Multiple Choice
-Refer to the graphs above to answer this question.Suppose that the price of orange juice increases from P1 to P2 and the demand curve for apple juice shifts to the right from D1 to D2.What can be said about the cross-elasticity of demand for the two juices and their relationship?
A) The cross elasticity of demand coefficient between the two juices is negative and the juices are substitutes.
B) The cross elasticity of demand coefficient between the two juices is negative and the juices are complements.
C) The cross elasticity of demand coefficient between the two juices is positive and the juices are complements.
D) The cross elasticity of demand coefficient between the two juices is positive and the juices are substitutes.
Correct Answer:
Verified
Correct Answer:
Verified
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