Raina Consumes 100% More Mechanical Pencils When the Price of Felt-Tip

question 130

Essay

Raina consumes 100% more mechanical pencils when the price of felt-tip pens increases by 50%.For Raina, pencils and pens are , and the cross-price elasticity of demand is
________.
A.complements; 1/2
B.substitutes; -1/2
C.complements; 2
D.substitutes; 2

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Definitions:

Government Subsidy

A financial contribution by a government to a private sector entity for the purpose of lowering the cost of a service or product or supporting a particular activity deemed beneficial.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to purchase at that price.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied.

Price Ceiling

A government-imposed limit on how high a price is charged for a product or service.