Answered

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We would expect the cross-price elasticity of demand between coffee and

A. tea to be negative, but positive between coffee and cream.
B. tea to be positive, but negative between coffee and cream.
C. tea, and coffee and cream to both be negative.
D. tea, and coffee and cream to both be positive.

Sagot :

GinnyAnswer

Final answer:

Cross-price elasticity shows how coffee and tea are substitutes while coffee and cream are complements.


Explanation:

The cross-price elasticity of demand between coffee and tea is expected to be negative, indicating they are substitute goods. This means that as the price of one increases, the demand for the other increases. On the other hand, the cross-price elasticity between coffee and cream would be positive, as they are complementary goods where a higher price for one leads to a lower quantity demanded for the other.


Learn more about Cross-price elasticity of demand here:

https://brainly.com/question/31293339


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