When the price of erasers increases from $1.50 to $2.50,the quantity demanded of pencils is unchanged.The cross-price elasticity of demand between erasers and pencils is ________ because erasers and pencils ________.
A)1; are substitutes
B)1/2; are complements
C)0; are normal goods
D)0; are unrelated
E)-1/2; are complements

Question

Quizplus · Accepted Answer

The fact that the quantity demanded of pencils is unchanged when the price of erasers increases indicates that erasers and pencils are unrelated goods. The cross-price elasticity of demand between unrelated goods is 0.

When the Price of Erasers Increases from $1