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Question

QUESTION 7

Assume that there are two commodities. A positive coefficient of cross-elasticity of demand

indicates that the two commodities are

A essential goods.

B complementary goods.

© substitute goods

D inferior goods.

(2 marke

Answer

B Complementary Goods.

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Cross-elasticity of demand measures the responsiveness of the demand for one good to a change in the price of another good. A positive coefficient...