ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A decrease in the price of golf balls.
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An increase in the price of golf clubs.
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A decrease in the cost of producing golf balls.
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An increase in the average household income when golf balls are a normal good.
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Detailed explanation-1: -Answer and Explanation: The correct option is: (d) An increase in average household income when golf balls are a normal good.
Detailed explanation-2: -What will happen in the market for golf clubs if the price of golf balls increases and at the same time the price of steel decreases? Assume golf balls are a complement to golf clubs and steel is used to make golf clubs. ANSWER: The demand for golf clubs will decrease, the supply of golf clubs will increase.
Detailed explanation-3: -Answer and Explanation: The demand for golf balls will decrease. Complementary goods have a negative cross-price elasticity of demand. This explains that the demand for one product will decrease when the price of the other product increases.
Detailed explanation-4: -Golf balls play an important part of your game. They can improve control, speed, and distance. That’s why there are so many different golf ball types on the market; everyone plays differently. Golf ball technology, from lightweight materials to having layers and varied compression levels, can help to improve your game.