Multiple Choice
Suppose that the cross price elasticity of demand between goods Y and Z equals 1.5. Which of the following is TRUE?
A) Goods Y and Z are complements because the cross price elasticity is greater than one.
B) Goods Y and Z are complements because the cross price elasticity is positive.
C) Goods Y and Z are substitutes because the cross price elasticity is greater than one.
D) Goods Y and Z are substitutes because the cross price elasticity is positive.
Correct Answer:
Verified
Correct Answer:
Verified
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