Last Month,sellers of Good Y Took in $100 in Total

question 244

Multiple Choice

Last month,sellers of good Y took in $100 in total revenue on sales of 50 units of good Y.This month sellers of good Y raised their price and took in $120 in total revenue on sales of 40 units of good Y.At the same time,the price of good X stayed the same,but sales of good X increased from 20 units to 40 units.We can conclude that goods X and Y are

• A)substitutes,and have a cross-price elasticity of 0.60.
• B)complements,and have a cross-price elasticity of -0.60.
• C)substitutes,and have a cross-price elasticity of 1.67.
• D)complements,and have a cross-price elasticity of -1.67.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time.

Useful Life

The period of time over which an asset is expected to be usable by an organization, affecting its depreciation or amortization schedules.

Depreciation Expense

The allocated portion of the cost of an asset, spread out over its useful life, representing wear and tear, obsolescence, or a decline in value.

Store Equipment

Fixed assets such as furniture and machinery used in a store for its operation and not for resale.