Question : 1. The price of good T falls by 20 % as a result the demand for subtitute good rise by 40 %. What is XED for good X?
How to answer =
1. calculation : quantity X = 40% = -2%
price T -20%
2. give an explaination of the answer = if price of good T rises for 1 %, Quantity demanded of good X falls 2 %
3. State the type of the product given by the answer = the product is a complementary good.
well done!
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