--%>
Assignment Help - homework help

Negative-positive coefficient in cross-elasticity of demand

When you compute cross-elasticity of demand, what are you trying to find out?  What do a negative coefficient and a positive coefficient imply?

E

Expert

Verified

You are trying to find out whether pair of goods is complements or substitutes.  A negative coefficient implies a substitute when a positive coefficient implies a complementary good.

   Related Questions in Microeconomics

  • Q : Marginal revenue of purely competitive

    When boosting output by hundred units raises total revenue by $1200, in that case a purely competitive firm’s marginal revenue the same as: (w) $1,200. (x) $120. (y) $12. (z) $120,000. I need a good answer on

    		•
  • Q : Define aggregate demand Define

    Define aggregate demand: Aggregate demand is stated as the money value of total goods and services demanded by an economy throughout a particular period.

    		•
  • Q : Competition and Rivalry When new firms

    When new firms enter an imperfectly competitive market, in that case the demand curves of the firms previously in the market will: (w) shift to the left. (x) shift to the right. (y) become vertical. (z) become horizontal.

    Q : Profits of large corporations Can

    Can someone help me in finding out the right answer from the given options. The enormously high profits of big corporations are: (1) Incentives which attract the competition by other firms. (2) Immune to the business cycles. (3) Mainly due to the corporate manipulatio

    		•
  • Q : Dilemma model of prisoner When the

    When the Kroger grocery chain raises the price of Starbuck’s Frappuccino, in that case Safeway will remain its price the same. Although, if Kroger drops the price of Frappuccino, then Safeway will match the price cut. This kind of behavior conforms to the: (1) s

    		•
  • Q : Human Capital-Individuals premium wages

    The firm which offers its workers by substantial specific training tends to: (i) Pay such individuals premium wages to try to make sure retaining such workers. (ii) Need workers to sign the legal contracts of indenture and peonage. (iii) Raise worker productivity appr

    		•
  • Q : Leftward shift of PPC What does

    What does leftward shift of PPC point out? Answer: It points out underutilization of resources.

    		•
  • Q : Existence of Economies of Scale I have

    I have a problem in economics on Existence of Economies of Scale. Please help me in the following question. Economies of the scale exist whenever, as output is raised: (i) Average costs increase. (ii) Explicit costs increase relative to the value of output. (iii) Aver

    		•
  • Q : Problem regarding Bilateral Monopoly

    The Bilateral monopoly models would be most suitably employed to analyze the negotiations among: (1) Le-Bron James, an all-star NBA basketball player and the Cleveland Cavaliers. (2) A newly hired clerk at Wal-Mart and the Wal-Mart Human Resources Dep

    		•
  • Q : Lowest possibility for price elasticity

    The price elasticity of demand would possibly be lowest for: (1) Dasani. (2) Deer Park. (3) Aquafina. (4) bottled water. (5) Perrier. Can anybody suggest me the proper explanation for given problem regarding