ECN 2020 Lecture 6: SET 6
Document Summary
The percentage change in quantity demanded will be greater than the percentage change in price. What is the cross-price elasticity of demand for two goods that are unrelated? zero. Economists avoid confusion over units in the computation of elasticity by using: percentage changes. If the cross-price elasticity of demand between two products is -3. 0, then the two products are: complements. When you compute a price elasticity of demand the answer is always: negative. At current prices of a highly addictive drug the demand for the drug is highly price: inelastic. An increase in the price of a substitute for ipads will lead to __________ in the quantity demanded of ipads so the cross-price elasticity of demand will be __________. an increase, positive. The more substitutes that exist for a particular product, the __________ the price elasticity of demand. greater. If the income elasticity of suvs is greater than 1, what is the good considered? a luxury.