QuestionAugust 4, 2025

Consider the following pairs of items: a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d. beef and pork e. air travel and weed killer Which of the pairs listed will have a positive cross-price elasticity? a and b only c and d only e only a, b, and c only

Consider the following pairs of items: a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d. beef and pork e. air travel and weed killer Which of the pairs listed will have a positive cross-price elasticity? a and b only c and d only e only a, b, and c only
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d. beef and pork
e. air travel and weed killer
Which of the pairs listed will have a positive cross-price elasticity?
a and b only
c and d only
e only
a, b, and c only

Solution
4.0(238 votes)

Answer

c and d only Explanation 1. Define Cross-Price Elasticity Cross-price elasticity measures how the quantity demanded of one good changes in response to a price change of another good. It is positive for substitutes and negative for complements. 2. Analyze Each Pair - **a. Shampoo and conditioner**: Complements, likely negative cross-price elasticity. - **b. iPhones and earbuds**: Complements, likely negative cross-price elasticity. - **c. Laptop computer and desktop computer**: Substitutes, likely positive cross-price elasticity. - **d. Beef and pork**: Substitutes, likely positive cross-price elasticity. - **e. Air travel and weed killer**: Unrelated, likely zero or negligible cross-price elasticity. 3. Identify Pairs with Positive Cross-Price Elasticity Only pairs c (laptop and desktop) and d (beef and pork) are substitutes, thus having positive cross-price elasticity.

Explanation

1. Define Cross-Price Elasticity<br /> Cross-price elasticity measures how the quantity demanded of one good changes in response to a price change of another good. It is positive for substitutes and negative for complements.<br /><br />2. Analyze Each Pair<br /> - **a. Shampoo and conditioner**: Complements, likely negative cross-price elasticity.<br /> - **b. iPhones and earbuds**: Complements, likely negative cross-price elasticity.<br /> - **c. Laptop computer and desktop computer**: Substitutes, likely positive cross-price elasticity.<br /> - **d. Beef and pork**: Substitutes, likely positive cross-price elasticity.<br /> - **e. Air travel and weed killer**: Unrelated, likely zero or negligible cross-price elasticity.<br /><br />3. Identify Pairs with Positive Cross-Price Elasticity<br /> Only pairs c (laptop and desktop) and d (beef and pork) are substitutes, thus having positive cross-price elasticity.
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