If a 1 percent decrease in the price of product A brings about a 3 percent increase in the sales of product B, then:
A) products A and B are complementary.
B) the cross elasticity of demand between these two products is positive.
C) products A and B are substitutes.
D) the demand for these products is inelastic.
E) the total revenue earned from product A will decrease.

Question

Quizplus · Accepted Answer

The Answer of If a 1 percent decrease in the price of product A brings about a 3 percent increase in the sales of product B, then:
A) products A and B are complementary.
B) the cross elasticity of demand between these two products is positive.
C) products A and B are substitutes.
D) the demand for these products is inelastic.
E) the total revenue earned from product A will decrease.

If a 1 Percent Decrease in the Price of Product