The cross elasticity of demand measures the responsiveness of the quantity demanded of a good to changes in the prices of:

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Multiple Choice

The cross elasticity of demand measures the responsiveness of the quantity demanded of a good to changes in the prices of:

Explanation:
The cross elasticity of demand measures how the quantity demanded of a good responds to changes in the price of related goods. Those related goods include both substitutes and complements. If another good is a substitute, a rise in its price tends to increase the demand for the original good, giving a positive cross elasticity. If the other good is a complement, a rise in its price tends to decrease the demand for the original good, giving a negative cross elasticity. If the goods are unrelated, the cross elasticity is zero. So cross elasticity covers both substitutes and complements, not just one type.

The cross elasticity of demand measures how the quantity demanded of a good responds to changes in the price of related goods. Those related goods include both substitutes and complements. If another good is a substitute, a rise in its price tends to increase the demand for the original good, giving a positive cross elasticity. If the other good is a complement, a rise in its price tends to decrease the demand for the original good, giving a negative cross elasticity. If the goods are unrelated, the cross elasticity is zero. So cross elasticity covers both substitutes and complements, not just one type.

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