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If a 1 Percent Decrease in the Price of One

Question 55

Multiple Choice

If a 1 percent decrease in the price of one good generates a 3 percent increase in the quantity demanded for another good, then the


A) two goods are complementary
B) cross elasticity between the two goods is positive
C) two goods are substitutes
D) price elasticity of demand for the good whose quantity demanded increased must be inelastic
E) price elasticity of demand for the good whose quantity demanded increased must be elastic

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