Answer to Question #17486 in Microeconomics for SON
5 When the price of good X falls from
9, the demand for good Y
increased from 20 Kg. to 25 Kg.
a) What is the cross elasticity of demand of good Y for good X?
b) Are Goods X and Y compliments or substitutes?
Price falls on 10% Quantity increases on 25% Cross Elasticity is 2.5 25%/10% According to value of cross elasticity we can say that Goods XX and Y are compliments