ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Its complements but not its substitutes.
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Its substitutes but not its complements.
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Its substitutes and its complements.
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Neither its substitutes nor its complements.
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Detailed explanation-1: -A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as cross elasticity of demand. Cross elasticity of demand is calculated by dividing the proportionate change of quantity demanded of one commodity by the proportionate change of price of another commodity.
Detailed explanation-2: -The cross elasticity of demand is an economic concept that measures the responsiveness in the quantity demanded of one good when the price for another good changes.
Detailed explanation-3: -Cross Elasticity of Demand Explained It evaluates the relationship between two products when the price of one of them changes. It does this by measuring the increase or decrease in the demand for a product following the change in the price of another product.
Detailed explanation-4: -Cross price elasticity of demand is used to determine whether two goods and/or services are substitutes and/or complementary goods and services. Cross price elasticity of demand = % change in quantity demanded for Good A / % change in the price of Good B.
Detailed explanation-5: -Cross elasticity of demand refers to the way that changes in the price of one good can affect the quantity demanded of another good. This relationship can vary depending on whether the two goods are substitutes, complements, or unrelated to each other.