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Suppose the cross-elasticity of demand for products A and B is +3.6, and for products C...

Suppose the cross-elasticity of demand for products A and B is +3.6, and for products C and D is -5.4. What can you conclude about how products A and B are related? Products C and D?

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Answer #1

For A&B, the couss elasticity is +3.6 . Since it is positive ... the increase in price of one good causes the quantity demand

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