Cross-price elasticity is used to determine whether goods are inferior or normal goods.

Name: Cross-price elasticity is used to determine whether goods are inferior or normal goods.
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Question

Quizplus · Accepted Answer

Cross-price elasticity of demand measures the responsiveness of the quantity demanded for a good to a change in the price of another good, indicating whether the goods are substitutes or complements, not whether they are inferior or normal goods.

Cross-Price Elasticity Is Used to Determine Whether Goods Are Inferior