Suppose That When the Price of Good X Falls from $10

question 259

Multiple Choice

Suppose that when the price of good X falls from $10 to $8,the quantity demanded of good Y rises from 20 units to 25 units.Using the midpoint method,the cross-price elasticity of demand is

• A)-1.0,and X and Y are complements.
• B)-1.0,and X and Y are substitutes.
• C)1.0,and X and Y are complements.
• D)1.0,and X and Y are substitutes.

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Definitions:

Payment of Dividends

The distribution of a portion of a company's earnings to its shareholders as determined by the company's board of directors.

Factory Overhead

Indirect costs related to manufacturing, such as utilities, maintenance, and salaries of supervisory personnel not directly involved in production.

Cost

The amount of money that needs to be spent to purchase, produce, or maintain something.

Benefit

An advantage or profit gained from something, often referring to employment perks beyond salary, such as health insurance.