Question

If the cross-price elasticity of demand between Good A and Good B is 3, the price of Good B increases, and the price elasticity of demand for Good B is inelastic, we can expect to see a(n) ________ change in the quantity demanded for Good A.

large
infinite
zero
small
one-for-one

Answer 1

Answer:

We can expect to see a large change in the quantity demanded for Good A.

Explanation:

• As the price change in the price of good B is inelastic, it is but clear that the price of good B would not show any fluctuations even if there is an increase or decrease in the demand for good B.
• As the price of good B is not subject to decrease in the near future, it can be expected that the demand for good A would exhibit a sudden rise.