Question : The cross elasticity of demand between CocaCola and PepsiCola is ________ so Coke and Pepsi are ________.
Option 1: Positive; complements
Option 2: Negative; substitutes
Option 3: Negative; complements
Option 4: Positive; substitutes
Correct Answer: Positive; substitutes
Solution : A product or service that consumers perceive to be substantially the same as or sufficiently similar to another product is referred to as a substitutable good. Hence coke and Pepsi Cola are substitute goods and they have a positive relationship. So option d is the correct answer.
Question : If the cross elasticity of demand between two goods is negative, it means the goods are:
Question : If the cross elasticity of demand between two goods is zero, it means the goods are:
Question : The cross elasticity of demand assesses how responsively a certain good's quantity desired is to changes in its prices.
Question : If two commodities are complements, then their cross-price elasticity is
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