Suppose the cross-price price elasticity of demand for butter and margarine is equal to 0.96 while the answer?

Question

Suppose the cross-price price elasticity of demand for butter and margarine is equal to 0.96 while the answer for water and lemon is –0.13.This means that butter and margarine are ______ while water and lemon are ______.

a.) complements; substitutes

b.) substitutes; complements

c.) inelastic goods; elastic goods

d.) elastic goods; complements

Answer 1

b.) substitutes; complements

Butter and margarine have positive cross-price price elasticity of demand.

Water and lemon have negative cross-price price elasticity of demand.

http://en.wikipedia.org/wiki/Cross_elast...