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JAMB Economics 1978 Question 16

Question 16

Elasticity

The effects on the demand for product A caused by a change in the price of product B is called

  1. A.cross-elasticity of demand
  2. B.elasticity of supply
  3. C.competitive demand
  4. D.composite demand
  5. E.joint demand.
Show the answer and explanation

Answer: A (cross-elasticity of demand)

Explanation

Cross elasticity of demand measures how demand for one good responds to a change in the price of another good.