Considering the Concept of Cross-Price Elasticity,if Two Goods Are Substitutes

question 74

Multiple Choice

Considering the concept of cross-price elasticity,if two goods are substitutes:

• A) an increase in the price of one causes a decrease in the demand for the other.
• B) a decrease in the price of one causes an increase in the demand of the other.
• C) an increase in the price of one causes an increase in the demand for the other.
• D) the cross-price elasticity is negative.

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Definitions:

Chemical Dyes

Substances used to impart color to materials, such as fabrics, by the process of chemical bonding.

Biological Model

A framework in psychology that explains mental and physical health issues through biological factors and processes.

Psychoanalytic

Relating to a theory and therapeutic method developed by Freud emphasizing unconscious mental processes in shaping feelings, thoughts, and behaviors.

Biological Model

An approach in psychology and medicine that considers biological processes and genetic factors as the primary basis for behavior and mental states.