What is the correct answer?


Cross-elasticity of demand or cross-price elasticity between two independent goods will be:

A. Negative

B. Positive

C. Infinite

D. Zero

Correct Answer :

D. Zero

If two goods are independent then cross-elasticity of demand is zero b/c as the price of one good changes, there will be no change in demand for the other good)

Related Questions

Rational economic behavior on the part of the consumer means that he will: Suppose income increases by 10% and demand for commodity increases by… Change in quantity demanded refers to: In case of income effect, the level of consumers satisfaction rises when: If the demand curve is inelastic then: The relationship between MC and MP shown by the marginal cost concept… Of the following, which one corresponds to fixed cost? After reaching the saturation point consumption of additional units of… If the commodity is inferior then: Each short run average cost curve: In case of perfect competition, TR curve rises at a: An iso-product (an isoquant) curve slopes: The giffen paradox is an exception to law of: Consumer surplus is the difference between The CES production function shows: A loss bearing firm will continue to produce in the short run so long… In short run, a firm would remain in business as long as which one of… Which of the following theories of trade cycle was presented by William… Implicit costs are the costs: Who introduced the concept of Elasticity of Demand into economic theory? In dominant price leadership model, the small firms are like: Liquidity of Preference Theory was introduced by: Other things remaining the same, when a consumers income increases his… Firms average and marginal revenues are equal under: An indifference curve normally slopes downward from: In market sharing cartel model, cartel determines the shares of: The Chamberline model recognizes mutual: Economies of large-scale production: In case of straight-line isoquant, the factors are not substituted because… In Prisoners Dillemma, the players are: