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Cross-Price Elasticity of Demand
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Cross-Price Elasticity of Demand
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4. Elasticity / Cross-Price Elasticity of Demand / Problem 1
Problem 1
A price increase in smartphones leads to a decrease in the quantity demanded of smartphone apps. What does this suggest about their relationship?
A
Smartphones and smartphone apps are luxury goods.
B
Smartphones and smartphone apps are substitutes.
C
Smartphones and smartphone apps are unrelated.
D
Smartphones and smartphone apps are complements.
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