Ask Question
BusinessBusiness
21 January, 16:54

If the cross price elasticity of demand for two goods is measured to be 1.32. What can you deduce the relationship between these two goods?

+1
Answers (1)
  1. 21 January, 17:01
    0
    The two goods are substitutes.

    Explanation:

    The cross-price elasticity of demand measures the change in the demand of a commodity because of a change in the price of relative good. It is calculated as the ratio of change in demand and change in the price of the other good.

    If cross-price elasticity of demand for two goods is 1.32, it implies that a proportionate change in the price of relative goods causes the demand for the good to change by more than proportionate in the same direction.

    For instance, an increase in the price of relative good causes a more than proportionate increase in the demand for the good.

    This implies that the two goods are substitutes.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If the cross price elasticity of demand for two goods is measured to be 1.32. What can you deduce the relationship between these two goods? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Suppose you invested in this group of mutual funds and diversified the investment by placing in domestic equity funds, in international equity funds, in specialty stock funds, and in hybrid funds.
Answers (1)
Study the entries in Lupe's records and bank statement. What is the first action Lupe should take when she discovers a difference between her records and the bank's records?
Answers (1)
Assume that the CAPM holds. One stock has an expected return of 8% and a beta of 0.5. Another stock has an expected return of 13% and a beta of 1.5. Part 1 IB - Attempt 1/10 for 10 pts. What is the expected return on the market?
Answers (1)
What are two questions you ask before investing money
Answers (1)
Crawford Corporation incurred the following transactions. 1. Purchased raw materials on account $53,000.2. Raw Materials of $41,800 were requisitioned to the factory.
Answers (1)
New Questions in Business
Oakpark, Inc.'s $180,000 Accounts Receivable balance at December 31 consisted of $160,000 current balances and $20,000 past-due balances. At December 31, the Allowance for Doubtful Accounts had a credit balance of $1,600.
Answers (1)
Hans Company purchased bonds of Zimmer Corporation. Hans Company expects to hold the Zimmer Corporation bonds for more than one year. On its classified balance sheet, Hans Company should report the Zimmer Corporation bonds as1. a current asset. 2.
Answers (1)
Bob and Carol refinanced their sole residence, valued at $500,000, in 2019. Under the refinancing arrangement, they refinanced their $300,000 indebtedness for $400,000, receiving $100,000 in cash that they used to pay for their daughter's wedding.
Answers (1)
Suppose a farmer is a price taker for soybean sales with cost functions given by TC =.1q2 + 2q + 30 MC = 2q + 2 If P = 6, the profit-maximizing level of output is a. 10 b. 20 c. 40 d. 80
Answers (1)
Match the situations to the sociocultural factors that could cause barriers to global trade. behavior religion language stability Ben, a US citizen, is planning on setting up a business with Japan.
Answers (2)
Home » Business » If the cross price elasticity of demand for two goods is measured to be 1.32. What can you deduce the relationship between these two goods?
Sign Up Forgot Password?