If Two Goods Are Substitutes, the Cross-Price Elasticity of Demand

question 67

Multiple Choice

If two goods are substitutes, the cross-price elasticity of demand must be:

• A) negative.
• B) positive.
• C) zero.
• D) infinite.

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Definitions:

Commercial Refrigerators

Refrigeration equipment designed specifically for commercial use to store perishable goods under controlled temperatures.

Labor-Hour

A measure of output or work done in terms of the time spent by an employee working, commonly used in calculating wages or production costs.

Overhead Variances

Differences between the actual overhead costs incurred and the overhead costs that were budgeted or expected.

Fixed

A financial term referring to costs that do not change with the level of production or sales, such as rent, salaries, and insurance.