Suppose that goods X and Y are unrelated goods; they are neither substitutes nor complements. The cross-price elasticity of demand for good Y when the price of good X changes will _____.
A) be greater than 1
B) be equal to 0
C) lie between 1 and 2
D) be equal to -1

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand measures the responsiveness of the quantity demanded for a good to a change in the price of another good. If two goods are unrelated, meaning they are neither substitutes nor complements, the change in the price of one will have no effect on the demand for the other, resulting in a cross-price elasticity of demand equal to 0.

Suppose That Goods X and Y Are Unrelated Goods; They