The cross-price elasticity for Good X (to a change in Good Y's price) is -0.7. The cross-price elasticity for Good X (to a change in Good Z's price) is +0.7. Good X's income elasticity is -0.7.
If Good X's producer wishes its demand to increase, which of the following scenarios is the most preferred
(a) The economy experiences unexpected prosperity; the price of Good Y increases.
(b) The economy experiences an unexpected recession; the price of Good Y increases.
(c) The economy experiences unexpected prosperity; the price of Good Y decreases.
(d) The economy experiences an unexpected recession; the price of Good Z increases.
(e) The price of Good Y increases; the price of Good Z increases.
Explain your answer.