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From course:

Economics A Level

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Question:

What XED will occur if there are: 1. Substitutes 2. Complements 3. There is a XED of 0

Author: go kys



Answer:

1. Substitutes will have a Positive XED. This means a Fall in Price of One Good leads to a Fall in Demand for the Other Good. The Intensity is Dependent on how Linked the Goods are. 2. Complementary Goods will have Negative XED. Increase in Price for One leads to a Fall in Demand for its Complements 3. This means the Good are not Independent and aren't Related.


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go kys
go kys