Two Items Which Have a Negative Cross Price Elasticity of Demand

question 260

Multiple Choice

Two items which have a negative cross price elasticity of demand are referred to as

• A) luxury goods.
• B) inferior goods.
• C) substitutes.
• D) complements.

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Definitions:

Quantity Demanded

The cumulative quantity of a product or service that buyers are ready and capable of buying at a certain price level.

Elasticity Coefficient

A numeric value that measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Buyer Responsiveness

The degree to which consumers adjust their demand for a product or service in response to changes in price or other factors.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.