Question

If the price of flashlights falls while the demand for batteries rises​, is the cross-price elasticity of demand between the pair of products likely to be positive or​ negative? Therefore, the cross-price elasticity of demand between "substitutes" is most likely most likely_______ and the cross-price elasticities of demand between "complements" is most likely:________

Answer 1

negative

positive

negative

Step-by-step explanation:

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

If cross price elasticity of demand is positive, it means that the goods are substitute goods.

Substitute goods are goods that can be used in place of another good.

if the price of a good increases, the demand for the substitute increases and if the price of the good reduces, the demand for the substitute increases.

If the cross-price elasticity is negative, it means that the goods are complementary goods.

Complementary goods are goods that are consumed together

Flashlight and batteries are complements because they are used together.