What does a cross-price elasticity of demand of zero indicate?

Demand is perfectly elastic.

The goods are substitutes.

The goods are unrelated.

The goods are complements.

Demand is unit-elastic.

A cross-price elasticity of demand of zero indicates that **the goods are unrelated**. 

Cross-price elasticity of demand measures the responsiveness of the quantity demanded for one good when the price of another good changes. If the cross-price elasticity is zero, it means that a change in the price of one good has no effect on the demand for the other good, indicating that the two goods are unrelated.

Would you like further details or have any questions?

Here are five related questions for deeper understanding:
1. What is the formula for calculating cross-price elasticity of demand?
2. How does a positive cross-price elasticity indicate substitute goods?
3. Can you explain the relationship between complements and negative cross-price elasticity?
4. What are examples of unrelated goods in the real world?
5. How does cross-price elasticity differ from price elasticity of demand?

**Tip:** Understanding the sign of cross-price elasticity (positive or negative) can help you identify whether goods are substitutes or complements.

What does a cross-price elasticity of demand of zero indicate?

Learn what a cross-price elasticity of demand of zero means. This concept explains that the goods are unrelated, meaning a price change in one good does not affect the demand for another good. Suitable for college-level economics students.

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