What Is the Significance of a Positive Cross-Elasticity Coefficient Between

question 30

Multiple Choice

What is the significance of a positive cross-elasticity coefficient between products X and Y?

• A)The demand for both products must be elastic.
• B)The demand for both products must be inelastic.
• C)Products X and Y must be substitutes.
• D)Products X and Y must be complements.
• E)There is no significance since all calculations of cross elasticity are positive.

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Definitions:

Market

A place or platform where buyers and sellers come together to exchange goods, services, or information, often setting prices and terms in the process.

Critical

Pertaining to a crucial or decisive point that requires immediate attention or presents a significant challenge.

Competition

The rivalry between businesses to sell their goods or services to customers, often leading to better quality and prices.

Environmental Change

Alterations to the natural environment caused by human activity or natural processes, impacting ecosystems, climate, and land use.