-In the above table, the cross price elasticity of demand for good A with good B when PB falls from $20 to $18 is
A) -2.
B) 0.
C) +1.
D) -1.

Question

-In the above table, the cross price elasticity of demand for good A with good B when PB falls from $20 to $18 is
A) -2. 
B) 0. 
C) +1. 
D) -1.

Quizplus · Accepted Answer

The cross price elasticity of demand measures the responsiveness of the quantity demanded for one good to a change in the price of another good. A positive value indicates that the two goods are substitutes, meaning if the price of one good falls, the demand for the other good decreases (or vice versa). Since the specific values and the table are not provided, the correct answer cannot be determined from specific data. However, based on the information typically associated with calculating cross price elasticity, a positive value (+1) suggests that as the price of good B decreases, the demand for good A increases, indicating they are substitutes.

-In the Above Table, the Cross Price Elasticity of Demand