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Suppose That When the Price of Good X Falls from $10

Question 287

Multiple Choice

Suppose that when the price of good X falls from $10 to $8,the quantity demanded of good Y rises from 20 units to 25 units.Using the midpoint method,


A) the cross-price elasticity of demand is -1.0,and X and Y are complements.
B) the cross-price elasticity of demand is -1.0,and X and Y are substitutes.
C) the cross-price elasticity of demand is 1.0,and X and Y are complements.
D) the cross-price elasticity of demand is 1.0,and X and Y are substitutes.

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