If the cross-price elasticity of demand for good $\mathrm{X}$ with respect to good $\mathrm{Y}$ equals 0 , how is that value interpreted?

Choose 1 answer:
(A) These goods are normal goods, and a change in buyers income increases the quantity demanded of good $\mathrm{X}$.
(B) These goods are necessities, and the quantity demanded of good $X$ never changes even if the price of good $X$ changes.
(C) These goods are substitutes, and the quantity demanded of good $X$ decreases if the price of good $Y$ decreases.
(D) These goods are unrelated, and a change in the price of good $Y$ has no effect on the quantity of good $X$ demanded.
(E) These goods are complements, and the quantity demanded of $\operatorname{good} X$ increases if the price of good $Y$ decreases.

Question

If the cross-price elasticity of demand for good $\mathrm{X}$ with respect to good $\mathrm{Y}$ equals 0 , how is that value interpreted?

Choose 1 answer:
(A) These goods are normal goods, and a change in buyers income increases the quantity demanded of good $\mathrm{X}$.
(B) These goods are necessities, and the quantity demanded of good $X$ never changes even if the price of good $X$ changes.
(C) These goods are substitutes, and the quantity demanded of good $X$ decreases if the price of good $Y$ decreases.
(D) These goods are unrelated, and a change in the price of good $Y$ has no effect on the quantity of good $X$ demanded.
(E) These goods are complements, and the quantity demanded of $\operatorname{good} X$ increases if the price of good $Y$ decreases.

Accepted Answer

∻Solution∻ ‖ a ⋮ Cross-Price Elasticity: The cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. ‖ ‖ b ⋮ Interpretation of Zero Value: A cross-price elasticity of demand value of 0 indicates that the two goods are unrelated. This means that a change in the price of good Y has no effect on the quantity demanded of good X. ‖ ∻Answer∻ ⚹ (D) These goods are unrelated, and a change in the price of good $Y$ has no effect on the quantity of good $X$ demanded. ⚹ ∻Key Concept∻ ⚹ Cross-Price Elasticity of Demand ⚹ ∻Explanation∻ ⚹ A cross-price elasticity of demand value of 0 signifies that the goods are unrelated, meaning the price change of one good does not affect the demand for the other good. ⚹◊What is the formula for calculating the cross-price elasticity of demand?⍭ Generate me a similar question◊

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