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  • If two goods are perfect substitutes for each other, the ...
Multiple choice

If two goods are perfect substitutes for each other, the cross elasticity is

  1. zero

  2. 1

    • 1
  3. infinite

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If two goods are perfect substitutes for each other, the cross elasticity is infinite. If goods are unrelated, the cross elasticity is zero.

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