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erik [133]
3 years ago
5

If the income elasticity of demand for good X is negative and the cross-price elasticity of demand between good X and good Y is

negative, which of the following must be true of good X
Business
1 answer:
Stella [2.4K]3 years ago
4 0

Answer:

Good X is Inferior Good, Good X is complementary good of Good Y.

Explanation:

Demand : Buyers ability & willingness to buy given price - has 4 factors (price of good, income, price of related goods, Taste).

Based on Income : Normal Goods demand vary directly with Income, more demand at higher income & vice versa. Eg: Normal grains like Wheat, Rice. Inferior Goods demand vary inversely with Income, more demand at lower income & vice versa. Eg: Low grade, cheap grains like Bajra.

Price of Related Goods: Related Goods can be Substitutes or Complements.  Substitute (interchangeable) goods price are directly related a with good's demand because - substitute price rise makes the good relatively cheap, increases its demand & vice versa. Complementary (together used) goods price are inversely related with a good's demand because - complements price rise makes the product combination expensive, decreases its demand & viceversa. 1st eg: Coke, Pepsi ; 2nd eg: Tea, Sugar.

If income elasticity of demand for good X is negative : implies it varies inversely with Income - It is an Inferior Good

If Cross Price Elasticity of demand between good X and good Y is negative : Implies Y's prices & X's demand vary inversely - Both are complements of each other.

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In economics, demand is the number of goods that consumers are willing to purchase at various prices in a particular location and during a particular period of time. [1] The relationship between price and quantity demanded is also called the demand curve. Demand for a particular item is a function of perceived need, price, perceived quality, convenience, available alternatives, disposable income, buyer preferences, and many other options.

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Learn more about demand here

brainly.com/question/1288364

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8 0
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True

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The churn rate can also refer to the percentage of employees leaving or quitting a company during one year.

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