0
Are two goods complements if the cross-elasticity coefficient is negative?
Wiki User
∙ 10y ago
Cross Elasticity Coefficient is defined as when the price of a particular commodity rises how is the demand of another commodity changing. If the goods are complements like say for example petrol and petrol driven cars, if there is a price hike in petrol then demand for petrol cars would fall. Hence a negative cross elasticity of coefficient. On the other hand the demand for deisel cars would rise (given the deisel prices are constant) because they serve as substitutes, and will have a positive cross elasticity.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
What are goods complements?
canoe and paddles
How do complements affect demand?
Because of complimentary goods demand increase.
If two goods are complements?
I thought the question would fit for Government. Not math.
What is it called if two goods are complements?
A decrease in the price of one will increase the demand for the other.
If two goods are complements their cross elasticity of demand will normally be?
No! That's why I came here! B======D --- --- --- --- (=^_^=)
What are goods complements?
canoe and paddles
How do complements affect demand?
Because of complimentary goods demand increase.
If two goods are complements?
I thought the question would fit for Government. Not math.
What is it called if two goods are complements?
A decrease in the price of one will increase the demand for the other.
If two goods are complements their cross elasticity of demand will normally be?
No! That's why I came here! B======D --- --- --- --- (=^_^=)
How price of related goods affect demand?
Price of related goods fall into two categories: substitutes and complements. Complements are when a price decrease in one good increases the demand of another good. Substitutes are when a price decrease in one good decreases the demand for another good.
Which type of goods is most adversely affected by recessions?
Goods for which the income-elasticity coefficient is relatively high and positive
Can we use the concept of price elasticity to identify a brand's competitors?
Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.
What are demand shifters?
Prices of Related Goods (Substitutes and Complements) Changes in Income Preferences (Taste) Expectations Population (Number of Buyers)
Suppose the demand for good x is lnqxd 21 - 0.8 lnpx - 1.6 lnpy 6.2 lnm 0.4 lnax then you know goods x and y are A. Substitutes B. Complements C. Normal goods D. Inferior goods?
The famous sports goods are made in the city of
What is an Economic Definition of Complements?
products that increase the value of other products / products related in such a way that an increase in the price of one reduces the demand for bolth (found in economics principles & practices from the Texas edition book)
What are the difference between giffen good and inferior good with 3 examples?
All Giffen goods are inferior goods. But not all inferior goods are Giffen goods. For inferior goods, the negative substitution effect will more than offset the positive income effect, so that total price effect will be negative. For Giffen goods, the positive income is positive and very strong that the law of demand does not hold. Price elasticity of Giffen good is positive. Inferior Goods: Cheap goods Giffen Goods: Rice, wheat, noodles are Giffen goods in China
