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If commodities X and Y are substitute, their cross elasticity of demand will be

Economics
JAMB 2023

If commodities X and Y are substitute, their cross elasticity of demand will be

  • A. One
  • B. positive
  • C. negative
  • D. zero
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Correct Answer: Option B
Explanation

Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. If two goods are substitutes, an increase in the price of one will lead to an increase in demand for the other, and vice versa. Therefore, the cross elasticity of demand for substitutes is positive.


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Project Topics and Materials, Post-UTME past questions - Download now or upload yours to get paid
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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