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if a 10% decrease in the price of product A brings about a 3% increase in the sales of product B, then
a. product A and B are complementary
b. the cross elasticity of demand between these two products is positive
c. product A and B are substitutes
d. the demand for these products is inelastic
e. the total revenue earned from product A will decrease
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Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different income streams.
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