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Cross elasticity of demand In recent years the price of natural gas in the United States has fallen to a record low relative to the prices of fossil fuels, including coal. Over the same period the share of US electricity output generated by gas has increased and output generated by coal has fallen. What do these facts suggest to you about the cross elasticity of demand between coal and gas? Illustrate your answer with a pair of diagrams showing the market for coal and that for natural gas. Which supply curves would have needed to shift to produce results consistent with the reported facts? Which demand curves? Why?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92234689

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