41. What measures how the quantity demanded of one good responds to a change in the price of another good?
Answer: D
Cross-price elasticity of demand
Cross-price elasticity of demand measures how the quantity demanded of one good responds to a change in the price of another good, indicating the relationship between two different goods.
A) Equilibrium elasticity of demand
Equilibrium elasticity of demand is not a recognized economic term. It does not specifically measure the responsiveness of quantity demanded to price changes of another good; thus, it is not relevant to the question.
B) Quantity elasticity of demand
Quantity elasticity of demand refers to how the quantity demanded of a single good responds to changes in its own price, rather than the price of another good. Therefore, this option does not answer the question regarding the interaction between two different goods.
C) Price elasticity of demand
Price elasticity of demand measures the responsiveness of quantity demanded for a specific good to changes in its own price. It does not apply to the relationship between the demand of one good and the price of another, making this option incorrect.
D) Cross-price elasticity of demand
Cross-price elasticity of demand specifically assesses how the quantity demanded of one good changes in response to a change in the price of another good. This is the correct measure for understanding the interdependence of two goods in the market.
Conclusion
Cross-price elasticity of demand is the definitive answer as it directly addresses how changes in the price of one good affect the quantity demanded of another. The other options fail to capture this relationship, focusing instead on single goods or incorrect terms, which makes them unsuitable in the context of the question.