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1.2.3 Price, income and cross elasticities of demand

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Question 21

A city municipality introduces a high daily emission levy on diesel-powered commercial transport vehicles. Following the implementation of this levy, a regional logistics depot experiences a 12% decrease in its demand for specialised diesel-engine lubricant.

This market outcome demonstrates that diesel-powered commercial transport vehicles and specialised diesel-engine lubricant are:

substitute goods with a positive cross elasticity of demand

complementary goods with a negative cross elasticity of demand

substitute goods with a negative cross elasticity of demand

complementary goods with a positive cross elasticity of demand

1.2.3 Price, income and cross elasticities of demand Questions

  1. A Level
  2. /Economics
  3. /1.2.3 Price, income and cross elasticities of demand