If the cross-price elasticity of demand between Good A and Good B is 3,the price of Good B increases,and the price elasticity of demand for Good B is inelastic,we can expect to see a(n)________ change in the quantity demanded for Good A.
A) zero
B) small
C) infinite
D) one-for-one
E) large

Question

Quizplus · Accepted Answer

A cross-price elasticity of demand of 3 implies that for every 1% increase in the price of Good B, the quantity demanded for Good A will increase by 3%. However, if the price elasticity of demand for Good B is inelastic, it means that the change in price of Good B will result in a proportionately smaller change in the quantity demanded. Therefore, we can expect to see a small change in the quantity demanded for Good A as a result of the price increase in Good B.

If the Cross-Price Elasticity of Demand Between Good a and Good