The value of cross elasticity of demand between the price of petrol and the demand for motor bikes is
Cross elasticity is negative because petrol and motor bikes are complementary goods. A rise in the price of petrol raises the cost of using a motor bike and tends to reduce…
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The value of cross elasticity of demand between the price of petrol and the demand for motor bikes is
Answer and explanation
Correct answer B
Cross elasticity is negative because petrol and motor bikes are complementary goods. A rise in the price of petrol raises the cost of using a motor bike and tends to reduce demand for motor bikes, other things remaining equal.
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Gujarat SET (GSET)