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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
two goods whose cross-price elasticity of demand is negative are defined to be complements . Typically, these goods would tend to be consumed together as a pair, such as gasoline and automobiles or houses and furniture
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4.4. Cross-price Elasticity of Demand: Substitutes and Complements
eer. When the price of one of your favorite brands of beer rises, what would you do? You would probably buy less of that brand and more of a cheaper brand, so the cross-price elasticity of demand would be positive. Alternatively, <span>two goods whose cross-price elasticity of demand is negative are defined to be complements . Typically, these goods would tend to be consumed together as a pair, such as gasoline and automobiles or houses and furniture. When automobile prices fall, we might expect the quantity of autos demanded to rise, and thus we might expect to see a rise in the demand for gasoline. Ultimately, though, whether two


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