If the cross price elasticity between Goods A and B equals 0.7, then a reduction in the price of Good B will:
A)increase the demand for Good A and increase Good A's price as a result.
B)increase the demand for Good A and decrease Good A's price as a result.
C)decrease the demand for Good A and increase Good A's price as a result.
D)decrease the demand for Good A and decrease Good A's price as a result.

Question

If the cross price elasticity between Goods A and B equals 0.7, then a reduction in the price of Good B will:
A)​increase the demand for Good A and increase Good A's price as a result.
B)​increase the demand for Good A and decrease Good A's price as a result.
C)​decrease the demand for Good A and increase Good A's price as a result.
D)​decrease the demand for Good A and decrease Good A's price as a result.

Quizplus · Accepted Answer

The Answer of If the cross price elasticity between Goods A and B equals 0.7, then a reduction in the price of Good B will:
A)​increase the demand for Good A and increase Good A's price as a result.
B)​increase the demand for Good A and decrease Good A's price as a result.
C)​decrease the demand for Good A and increase Good A's price as a result.
D)​decrease the demand for Good A and decrease Good A's price as a result.

If the Cross Price Elasticity Between Goods a and B