Scenario 5-2 Suppose the Demand Function for Good X Is Given By

question 124

Multiple Choice

Scenario 5-2
Suppose the demand function for good X is given by: where is the quantity demanded of good X, is the price of good X,and is the price of good Y,which is related to good X.
-Refer to Scenario 5-2.Using the midpoint method,if the price of good X is constant at $10 and the price of good Y decreases from $10 to $8,the cross price elasticity of demand is about

• A)0.57,and X and Y are substitutes.
• B)-0.22,and X and Y are complements.
• C)-0.80,and X and Y are complements.
• D)-2.57,and X and Y are complements.

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Definitions:

MRP

Marginal Revenue Product, which is the additional revenue generated from hiring an additional unit of a resource or input.

Resources

Assets, materials, and inputs used to produce goods and services.

Purely Competitive Conditions

A theoretical market structure with many buyers and sellers, all small relative to the market, with no single entity able to influence price, leading to an efficient allocation of resources.

MPs

Abbreviation for Members of Parliament, who are elected to represent constituencies in the legislative body of a country.