When total revenue and price are directly related, demand is

Suppose that the cross price elasticity of demand between goods A and B equals 1.5. Which of the following is TRUE?

A) A and B are complements because the cross price elasticity is greater than one. B) A and B are complements because the cross price elasticity is positive. C) A and B are substitutes because the cross price elasticity is greater than one. D) A and B are substitutes because the cross price elasticity is positive.

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the

equilibrium quantity (Q) of X. Refer to the given information. A reduction in the number of firms producing X will: A. increase D, increase P, and increase Q. B. increase S, decrease P, and increase Q. C. decrease S, increase P, and decrease Q. D. decrease S, decrease P, and increase Q.