A remember if 2 goods are complements an increase in

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: n P and if supply , then P . Thus, the result for the equilibrium price is ambiguous. But for both cases the equilibrium qty.  since both curves shift to the right. 11. A, remember if 2 goods are complements, an increase in price of 1 good cause a decrease in QD of the other. 12. C, e ­cars and gas ­cars are substitutes, which means that the increase in price of gas will increase QD of e ­cars. But how can you determine the price of e ­ cars? There’s not enough info. 13. A, definition. 14. A, the own ­p elasticity is 0.7 which is less than 1, therefore demand is inelastic. 15. B, if demand is elastic a decrease in price will lead to more revenue, because demand would be very responsive to the decrease in price and QD would increase by a lot. 16. A, income elasticity for an inferior good is negative because when income , QD of the inferior good, like bu...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online