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Cross price elastic 1 - PowerPoint PPT Presentation

Q d always responds positively to the change in income.

Q d always responds positively to the change in income. Less Elastic. Y. More Elastic. Q d. O. ? Y in PQ space. P. Elastic D D``. D``. D`. Inelastic D D`. D. Q. Example. Rule: If sign is positive the good is normal and if sign is negative

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Cross price elastic 1 - PowerPoint PPT Presentation

Q d always responds positively to the change in income.