A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. What does this indicate?
a. Elasticity of demand for potato chips is 3.
b. Cross-price elasticity of demand for soda is -3.
c. Elasticity of demand for potato chips is 3.
d. Elasticity of demand for soda 3.
b. Cross-price elasticity of demand for soda is -3.
A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. It appears that cross-price elasticity of demand for soda is -3.
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Income on the horizontal axis at which the vertical distance to the 45-degree line is less than the vertical distance to the Ep line gives rise to a ________ amount of unplanned inventory investment, and thus ________ pressure on output
A) positive, upward B) positive, downward C) negative, upward D) negative, downward
While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect
a. True b. False Indicate whether the statement is true or false