Suppose That the Number of Units of Good X Consumed

question 230

Multiple Choice

Suppose that the number of units of good X consumed falls 12 percent when the price of good Y falls 8 percent. The cross price elasticity of demand between goods X and Y is

• A) 0.66.
• B) 1.75.
• C) 2.0.
• D) 1.5.

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Definitions:

Credible

Being believable or worthy of trust, often based on a proven track record or evidence.

Penetration Pricing

A pricing strategy where a product is initially offered at a lower price to attract customers and gain market share.

Market Acceptance

The degree to which a new product or service is embraced and used by consumers in a target market.

Initial Price

The first set price of a product or service at the start of its market launch, before any discounts or adjustments.