When the Price of a Bicycle Falls from $220 to $180

question 149

Multiple Choice

When the price of a bicycle falls from $220 to $180 and other things remain the same, I. the quantity demanded of bicycles increases from 150 to 250 an hour.
II. the quantity demanded of skateboards decreases from 125 to 75 an hour.
III. the quantity demanded of bicycle helmets increases from 170 to 230 an hour.
Skateboards and bicycles are ________ because a fall in the price of a bicycle brings ________ in the quantity demanded of skateboards. The cross elasticity of demand for skateboards with respect to bicycles is ________.

• A)complements; an increase; -0.4
• B)complements; a decrease; 0.4
• C)substitutes; an increase; -2.5
• D)substitutes; a decrease; 2.5
• E)substitutes; a decrease; 0.4

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