Suppose that a 10 percent increase in the price of normal good Y causes a 20 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is:A. negative and therefore these goods are substitutes. B. negative and therefore these goods are complements. C. positive and therefore these goods are substitutes. D. positive and therefore these goods are complements

C. positive and therefore these goods are substitutes.

Explanation:

Cross price elasticity is defined as a measure of the responsiveness of quantity demanded of a product to changes in price of another product. It is the percentage quantity change of a commodity when there is a percentage change in price of the other commodity.

Cross price elasticity= change in quantity of x/change in price of y

Cross price elasticity= 20/10= 2

The cross price elasticity is positive this indicates that the goods are substitutes. Increase in demand for one results in decraese in demand of the other

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.