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(Solved): Suppose that the cross price elasticity of demand between Goods X and Y is 1.75 Which of the foll ...



Suppose that the cross price elasticity of demand between Goods X and Y is 1.75 Which of the following statements is true? a. Goods X and Y are complements in consumption; holding everything else constant, a decrease in the price of Good Y causes an increase in the demand for Good X. b. Goods X and Y are substitutes in consumption; holding everything else constant, an increase in the price of Good Y causes an increase in the demand for Good X. c. Good X is a normal good, while Good Y is an inferior good; as the price of Good Y falls, the consumer demands greater quantities of Good X. d. Goods X and Y are Giffen normal goods; as the price of Good Y increases, the demand curve for Good X has a positive slope, and becomes more price elastic.



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