Question: The quantity demanded of good A increasesincreases by 2 2 percent when the price of good B rises by 5 5 percent and other things
The quantity demanded of good A
increasesincreases
by
percent when the price of good B rises by
percent and other things remaining the same.
Calculate the cross elasticity of demand. Are goods A and B complements or substitutes? How does the demand for good A change?
Question content area bottom
Part
The cross elasticity of demand of good A with respect to good B is
enter your response here.
Answer to decimal place. Do not use a fraction.
Part
The cross elasticity of demand tells us that good A and good B are and as the price of good B rises, the demand for good A
A
complementscomplements;
increasesincreases
B
inferior goodsinferiorgoods;
decreasesdecreases
C
complementscomplements;
decreasesdecreases
D
substitutessubstitutes;
increases
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