ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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complementary
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unrelated products
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subsitute
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elastic
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inelastic
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Detailed explanation-1: -Unrelated products have zero elasticity of demand. An increase in the price of pulses will have no effect on the demand for chocolates. You can measure the cross elasticity of demand by dividing the percentage of change in the demand for one product by the percentage of change in the price of another product.
Detailed explanation-2: -Unrelated products have zero cross-price elasticity.
Detailed explanation-3: -Answer and Explanation: If the cross-price elasticity of demand between two goods is negative, then the goods are considered to be complementary goods.
Detailed explanation-4: -In cross elasticity of demand, for unrelated goods the demand curve will be vertical line. Cross elasticity of demand measures the changes in the quantities of one good due to change in the price of other goods. It is mainly applicable in the case of substitutes and complementary goods.