Answer to Question #17486 in Microeconomics for SON

Question #17486
5 When the price of good X falls from 10 to 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?
1
Expert's answer
2012-11-02T10:24:08-0400
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

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