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Analyzing cross price elasticity of demand

Two goods have a cross price elasticity of +1.2.

a.Would you describe these goods as substitutes or complements?

b. If the price of one of the goods increases by 5 percent, what will happen to the demand for the other product, holding constant the effects of all other factors?

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M925804

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