The Cross-Price Elasticity Between Gillette Razors and a Related Good

question 265

Multiple Choice

The cross-price elasticity between Gillette razors and a related good is -3.4.What happens to the demand for the related good if the price of Gillette razors falls by 10 percent?

• A)The quantity demanded of the related good rises by 3.4 percent.
• B)The quantity demanded of the related good falls by 34 percent.
• C)The quantity demanded of the related good rises by 34 percent.
• D)The quantity demanded of the related good falls by 3.4 percent.

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Definitions:

Homeostatic

Pertaining to homeostasis, the process by which living organisms regulate internal conditions to maintain a stable, constant state.

Disequilibrium

Disequilibrium refers to a lack of balance or stability in either a physical, psychological, or economic context, often leading to a change or correction.

Needs

refer to the basic requirements or essentials necessary for an individual's well-being, including physical, emotional, and social aspects.

Drive-Reduction

A theory in psychology that posits that behavior is motivated by the need to reduce internal drives or tensions, such as hunger or thirst.