227k views
1 vote
suppose 10,000 units of good x are sold when the price of good y is $5 and that 12,000 units of good x are sold when the price of good y is $7. which statement is correct?

User TQCH
by
7.2k points

1 Answer

3 votes

Final answer:

The scenario suggests that as the price of Good Y increases, the demand for Good X also increases, indicating that Good X and Good Y are substitutes.

Step-by-step explanation:

The question provided is related to the concept of cross-price elasticity of demand in economics. It examines how the quantity demanded of Good X changes in response to a change in the price of Good Y. If an increase in the price of Good Y leads to an increase in the quantity demanded of Good X, this suggests that the two goods are substitutes. Conversely, if an increase in the price of Good Y would lead to a decrease in the quantity demanded of Good X, the goods would be considered complements. In this scenario, as the price of Good Y increases from $5 to $7 and the demand for Good X increases from 10,000 units to 12,000 units, it indicates that Good X and Good Y are likely substitutes.

User Lostriebo
by
7.0k points