Asked by
Jaskiranvir Chauhan
on Dec 05, 2024
Verified
Raina consumes 100% more mechanical pencils when the price of felt-tip pens increases by 50%.For Raina,pencils and pens are _____,and the cross-price elasticity of demand is _____.
A) complements;0.5
B) substitutes;-0.5
C) complements;2
D) substitutes;2
Mechanical Pencils
Writing instruments that use replaceable and mechanically extendable solid pigment cores, known as leads, to provide a consistent line width without the need for sharpening.
Felt-Tip Pens
Writing instruments that have a porous tip made of felt or similar materials, used for drawing or writing.
Cross-Price Elasticity
The degree to which the demand for one commodity reacts to alterations in the pricing of another commodity.
- Envelop the understanding of cross-price elasticity of demand and its role in clarifying the relationship between two goods (substitites or complements).
- Utilize elasticity theory to project how demand or consumption will adjust in response to pricing shifts of comparable merchandise or income fluctuations.
Verified Answer
HA
Learning Objectives
- Envelop the understanding of cross-price elasticity of demand and its role in clarifying the relationship between two goods (substitites or complements).
- Utilize elasticity theory to project how demand or consumption will adjust in response to pricing shifts of comparable merchandise or income fluctuations.