ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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more.
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same.
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less.
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cannot be determined from information given.
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Detailed explanation-1: -If two goods are complements, an increase in the price of one will lead to a reduction in the demand for the other – the cross price elasticity of demand is negative. If two goods are unrelated, a change in the price of one will not affect the demand for the other – the cross price elasticity of demand is zero.
Detailed explanation-2: -Printers and ink cartridges are complementary goods, so a decrease in the price of printers will increase its demand, and this will lead to an increase in the demand for ink cartridges.
Detailed explanation-3: -The cross elasticity of demand for substitute goods is always positive because the demand for one good increases when the price for the substitute good increases. Alternatively, the cross elasticity of demand for complementary goods is negative.
Detailed explanation-4: -Printers and printer ink are complementary goods. If the price of printers rises, what will likely happen to the demand for printer ink, and why is this the case?