Suppose That a 20 Percent Increase in the Price of Normal

question 195

Multiple Choice

Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decrease in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is

• A)negative, and therefore these goods are substitutes.
• B)negative, and therefore these goods are complements.
• C)positive, and therefore these goods are substitutes.
• D)positive, and therefore these goods are complements.

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Definitions:

Existing Supplier

A supplier with whom a company has an ongoing relationship for the provision of goods or services.

Buying Situations

Various contexts or scenarios influencing consumer purchasing behavior, including routine shopping, complex decision making, or impulse buying.

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products.

Straight Rebuy

A purchasing scenario in business-to-business transactions where the buyer reorders an existing product or service without modifications or consideration of alternative suppliers.