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

question 127

Multiple Choice

If the cross-price elasticity of demand of two goods is negative,what are those two goods called

• A)substitutes
• B)complements
• C)normal goods
• D)inferior goods

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Definitions:

Competitive Firm

A company operating in a market where it competes with other entities for market share and profits by offering the best possible mix of price and quality.

Profit Maximizing

The process or strategy undertaken by businesses to achieve the highest possible profit, often entailing decisions on pricing, production, and cost management.

Loss-Minimizing Level

The production level at which a firm minimizes its losses in the short run when it cannot cover total costs, but can cover variable costs.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.