You manage a fast-food restaurant. What is the sign of the cross-price elasticity between soft drinks and cheeseburgers? Why might you consider lowering the price of your cheeseburgers? Group of answer choices A. The cross-price elasticity is negative because these goods are substitutes. B. The cross-price elasticity is positive because these goods are complements. C. The cross-price elasticity is positive because these goods are substitutes. D. The cross-price elasticity is negative because these goods are complements.
Answer : The answer is option D.
In case of complementary goods the cross price elasticity of demand is negative. Here soft drinks and cheeseburgers are complementary goods. Hence the cross price elasticity of demand between soft drinks and cheeseburgers is negative. In case of complementary goods if the price of one good increase then the demand for another good decrease. As here soft drinks and cheeseburgers are complementary goods hence if the price of soft drinks increase then I may consider for lowering my cheeseburger price level. Therefore, option D is correct.
You manage a fast-food restaurant. What is the sign of the cross-price elasticity between soft drinks and cheeseburgers?...
Question 3 The cross-price elasticity of demand between rifles and bullets is likely to be: negative, because the goods are complements. positive, because the goods are complements. O positive, because the goods are substitutes. negative, because the goods are substitutes O « Previous No new data to save. Last checked at 12:02pm S O O c. A # 3 $ 4 % 5 c N 2 6 7 8 9 w e 0 t t у u
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