The Concept of Cross Price Elasticity of Demand Refers to The

question 189

Multiple Choice

The concept of cross price elasticity of demand refers to the:

• A) ratio of the percentage change in the quantity demanded of a good at a specific price to the percentage change in the price of a related good.
• B) ratio of the percentage change in the price of one good to the percentage change in the quantity demanded of a related good at a specific price.
• C) ratio of the price elasticity of a normal good to the price elasticity of a related good.
• D) change in income due to a change in the price of a related good.

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Definitions:

Total Revenue

The entire amount of income generated by the sale of goods or services before any expenses are deducted.

Price Lowered

A reduction in the cost of goods or services.

Total Revenue

The total amount of money a firm receives from sales of its products or services before any expenses are subtracted.

Demand

The total quantity of a good or service that consumers are willing and able to purchase at various price levels at a given time period.