ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a decrease in taste for product X and a decrease in the quality of product Y for which product X is a complement
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a decrease in the quality of a substitute and an increase in incomes
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an increase in the price of a substitute and an increase in population size
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an increase in the price of product Y for which product X is a complement and a successful advertising campaign for product X
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Detailed explanation-1: -When two goods X and Y are substitutes, then as the price of the substitute good Y rises, the demand for good X increases and the demand curve for good X shifts to the right, as in Figure (b).
Detailed explanation-2: -The demand curve shifts to the left if the determinant causes demand to drop. That means less of the good or service is demanded. That happens during a recession when buyers’ incomes drop. They will buy less of everything, even though the price is the same.
Detailed explanation-3: -As the price of Product X decreases, the demand curve for Product Y shifts to the right. X and Y are complementary goods. Good X and Good Y are complementary goods. That is, these goods are used together.
Detailed explanation-4: -Change in Taste and Preferences. Population Increase or Decrease. Price Change of a Related Good. Change in the Expected Future Prices. Change in the Income Level of Buyers. 14-Jan-2022