Author Topic: Close Substitute Goods  (Read 500 times)

Offline Md. Alamgir Hossan

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Close Substitute Goods
« on: April 13, 2017, 04:50:26 PM »
•   If two goods are close substitutes, there will be a high cross elasticity of demand.
•   Example, if price of Sainsbury’s flour increases 10%, demand for Hives flour may increase 20%. Therefore, the cross elasticity of demand is +2.0