CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

In the demand function for good x and its complement y, Qx = A + B x Px + C x I + D x Py, we are certain that ______.
A. C < 0
B. B > 0
C. D < 0
Explanation: Cross-price elasticity is negative for complements. Their consumption goes up or down together, as the price of one good goes up, the demand for both falls.

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