The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:
A)the income elasticity of demand for hot dogs.
B)the income elasticity of demand for hot dog buns.
C)the price elasticity of supply for hot dogs.
D)the negative cross-price elasticity of demand for hot dogs and hot dog buns.
E)the positive cross-price elasticity of supply for hot dogs and hot dog buns.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-When the price of hot dogs at the supermarket increases, the quantity demanded of hot dog buns declines. This situation describes:
A)the income elasticity of demand for hot dogs. 
B)the income elasticity of demand for hot dog buns. 
C)the price elasticity of supply for hot dogs. 
D)the negative cross-price elasticity of demand for hot dogs and hot dog buns. 
E)the positive cross-price elasticity of supply for hot dogs and hot dog buns.

Quizplus · Accepted Answer

The situation described is a change in the quantity demanded of hot dog buns in response to a change in the price of hot dogs, indicating a negative relationship or inverse correlation between the two goods. This is known as cross-price elasticity of demand, specifically negative cross-price elasticity. Choice D is correct. Choices A, B, and E do not accurately describe the situation presented. Choice C is not relevant to the question, as it asks about the price elasticity of supply for hot dogs, not hot dog buns.

The Figure Given Below Shows the Demand Curves for Five