Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 4 - Elasticity - Questions: 8

Answer

Products A and B are substitutes and Product C and D are complements.

Work Step by Step

Since the products A and B have a positive price elasticity, it means that a positive increase in price of one product (A) resulted in positive value/increase in demand for another product (B), which is the definition of a substitute. Since the products C and D have a negative price elasticity, it means that a positive increase in price of one product (C) resulted in negative value/decrease in demand for another product (D), which is the definition of a complement.
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