When the Price of a Bicycle Falls from $220 to $180

question 25

Multiple Choice

When the price of a bicycle falls from $220 to $180 and other things remain the same, I. the quantity of bicycles demanded increases from 150 to 250 an hour.
II. the quantity of skateboards demanded decreases from 125 to 75 an hour.
III. the quantity of bicycle helmets demanded increases from 170 to 230 an hour.
Bicycle helmets and bicycles are ________ because a fall in the price of a bicycle brings ________ in the quantity demanded of bicycle helmets. The cross elasticity of demand for bicycle helmets with respect to bicycles is ________.

• A)complements; an increase; -1.5
• B)substitutes; a decrease; 1.5
• C)substitutes; an increase; -0.67
• D)complements; a decrease; 0.67
• E)complements; an increase; 1.5