Economics (AS & A Level) · Oct / Nov 2021 · Paper 13 · Question 13

The cross-elasticity of demand of good S with respect to the price of good P is +1.5. The cross-elasticity of demand of good S with respect to the price of good R is –1.5. The cross-elasticity of demand of good P with respect to the price of good R is –1.5. What can be concluded about goods P, R and S?

1. AS and P are complements; P and R are substitutes.
2. BS and P are complements; R is an inferior good.
3. CS and P are substitutes; P and R are complements.
4. DS and P are substitutes; R is an inferior good.

As printed in the paper