Economics (AS & A Level) · May / June 2022 · Paper 11 · Question 13
9708Price elasticity, income elasticity and cross elasticity of demand
What can be concluded about a good with a positive cross-price elasticity of demand?
- AIts price will be sensitive to changes in prices of close substitutes.
- BIts price will be sensitive to changes in quantity demanded of close substitutes.
- CThe quantity demanded for this good will be sensitive to changes in prices of close substitutes.
- DThe quantity demanded for this good will be sensitive to changes in quantity demanded of close substitutes.
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Correct answer: C. The quantity demanded for this good will be sensitive to changes in prices of close substitutes.
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