Which of the following statements would show that veggie burgers are a substitute for regular hamburgers?
A)If you calculate the income elasticity and get a negative number
B)If you calculate the income elasticity and get a decimal less than one
C)If you calculate the cross-price elasticity and get zero
D)If you calculate the cross-price elasticity and get a positive number

Question

Quizplus · Accepted Answer

If you calculate the cross-price elasticity and get a positive number, you could show that veggie burgers are a substitute for regular hamburgers.
Key Takeaway: The cross-price elasticity of demand measures the relationships between substitutes and complements. By measuring how much the price of one good affects the quantity demanded of another good, economists and business owners can try to predict what may happen to their product within the marketplace. The formula for cross-price elasticity of demand is: (Percentage change in quantity demanded of good X) divided by the (percentage change in price of good Y)

Which of the Following Statements Would Show That Veggie Burgers