Which of the following statements is true? a. The cross-price elasticity of demand is the percentage change

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Which of the following statements is true?

a. The cross-price elasticity of demand is the percentage change in the demand of one good divided by the percentage change in the price of another good.

b. If the sign on the cross-price elasticity is positive, the two goods are substitutes; if it is negative, the two goods are complements.

c. The income elasticity of demand is the percentage change in demand divided by the percentage change in consumers’ income.

d. If income elasticity is positive, then the good is a normal good; if it is negative, the good is an inferior good.

e. All of these are true statements.

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Exploring Economics

ISBN: 9781544336329

8th Edition

Authors: Robert L. Sexton

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