Consider the following pairs of items a. shampoo and conditioner


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Consider the following pairs of items: a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d. beef and pork e. air-travel and weed killer Which of the pairs listed will have cross-price elasticity of zero

Answered by wiki @



Answer:

e. air-travel and weed killer

Explanation:

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

If the cross price elasticity is zero, there is no relationship between the pair of goods

If cross price elasticity of demand is positive, it means that the goods are substitute goods.  

The cross price elasticity of beef and pork and a laptop computer and a desktop computer should be positive

If the cross-price elasticity is negative, it means that the goods are complementary goods
. The cross price elasticity of an iPhones and earbuds should be negative


Do you know the better answer?

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