Suppose That When the Price of Good X Falls from $6

question 288

Multiple Choice

Suppose that when the price of good X falls from $6 to $4,the quantity demanded of good Y rises from 30 units to 40 units.Using the midpoint method,the cross-price elasticity of demand is

• A)-0.71,and X and Y are complements.
• B)-1.40,and X and Y are complements.
• C)-0.71,and X and Y are substitutes.
• D)-1.40,and X and Y are substitutes.

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Definitions:

Incremental Value

The additional value generated by undertaking a new project or decision, calculated as the difference between the value with and without the project.

Outstanding Stock

Outstanding stock is the total number of shares of a corporation that have been issued and are held by shareholders, including restricted shares owned by the company's officers and insiders.