XED

1. What does it mean if the XED of a good is positive?

The good is a substitute.

2. What does it mean if the XED of a good is negative?

The good is a complimentary good.

3. If XED < 1, are consumers responsive?

No, consumers are irresponsive to the price change of good Y

4.  What are the determinants of XED?

a) Substitutability- how easy it…