If the Cross-Price Elasticity of Demand Between Two Goods Is

question 153

Multiple Choice

If the cross-price elasticity of demand between two goods is 0.25, then we know that these goods are _____ because the cross-price elasticity of demand is _____.

• A) substitutes; greater than zero
• B) complements; less than one
• C) substitutes; less than one
• D) complements; greater than zero

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Definitions:

Savings Account

An account in a bank or financial institution where the main amount is safe and earns a small amount of interest.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Future Value

The value of an investment at a specified point in the future, accounting for factors like interest rates and compounding.

Payment

The transfer of money, or its equivalent, from one party to another in exchange for goods, services, or to fulfill a legal obligation.