Suppose the Cross-Price Elasticity of Demand for Butter and Margarine

question 39

Multiple Choice

Suppose the cross-price elasticity of demand for butter and margarine is equal to 0.96 but the cross-price elasticity for water and lemons is -0.13.This means that butter and margarine are _____,while water and lemons are _____.

• A)complements;substitutes
• B)substitutes;complements
• C)inelastic goods;elastic goods
• D)elastic goods;complements

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