XED II (Cross Elasticity of Demand)

Companies utilize cross-elasticity of demand for all the following EXCEPT:

• Expand more branches of their business

• Establish what price they should sell their goods for

• Ascertain which goods are complements for their products

• Ascertain which goods are substitutes for their products

Which of the following is TRUE about products with little or no substitutes?

• They can be sold at lower prices

• They can be sold at higher prices

• They have negative XEDs

• Their XEDs are zero (0)

Which of the following is TRUE about products that have close complements?

• They can be sold at high prices to attract demand for their complements that are more expensive

• They can be sold at cheaply to attract demand for their complements that are more expensive.

• They have positive XEDs

• Their XEDs are zero (0)

Some products have high XEDs this means:

• They have no complements

• Sales would decrease if you raise price

• Sales would increase if you raise price

• Sales are not affected by price

Some products have low XEDs this means:

• They have no complements

• Sales would drastically decrease if you raise price

• Sales largely unaffected if you raise price

• Sales are not affected by price

A measure of how the quantity demanded of one good responds to a change in the price of another.

• PED

• XED

• YED

• PES

XED formula.

• 
• 
• 
• None of the above

Multiple Answers Can Be Selected: Cross Elasticity of Demand shows if goods:

• Independent

• Sticky

• Substitutes

• Complements

If two products have a negative XED

• They are unrelated

• They are complements

• They are substitutes

• Both are inferior goods

If the cross elasticity of 2 products is 5.0, what are these two goods

• Apples and Pineapples

• Cars and Gasoline

• Blue Tesla Model 3 and Red Tesla Model 3

• MacBook and paper book