Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.An economist entered this city and calculated -Own price elasticity (PE) of product which was the change in demand of the product by change in price of the productIncome elasticity (IE) of product which was the change in demand of the product by change in the incomeCross price elasticity (CE) of product which was the change in demand of the product by change in price of the other productQ. What type of product has product X remained in average for its life cycle 2008-15?a)Luxury Goods- The increase in price leads to increase in demandb)Giffen Goods - The increase in income leads to decrease in demandc)Necessity Goods- The change in price has no much effect in demandd)Normal Goods - The demand increases with decrease in priceCorrect answer is option 'D'. Can you explain this answer?

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Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.

An economist entered this city and calculated -

Own price elasticity (PE) of product which was the change in demand of the product by change in price of the product

Income elasticity (IE) of product which was the change in demand of the product by change in the income

Cross price elasticity (CE) of product which was the change in demand of the product by change in price of the other product

Q. What type of product has product X remained in average for its life cycle 2008-15?

a)
Luxury Goods- The increase in price leads to increase in demand
b)
Giffen Goods - The increase in income leads to decrease in demand
c)
Necessity Goods- The change in price has no much effect in demand
d)
Normal Goods - The demand increases with decrease in price

Correct answer is option 'D'. Can you explain this answer?

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Most Upvoted Answer

Directors: In a particular city only two products X and Y were sold. ...

Own price elasticity of product =

Income elasticity of product =

Cross price elasticity of product =

Thus we can make the following table -

As all the variables are connected to each other, all the missing data can be found. The solution may be found by not calculating everything as given above. Cross elasticity is given here for all years just for reference. The answers can thus be found by applying the formulae and then solving.

Ex. We know the income elasticity of X for the year 2009-10, we can find demand of X for 2009-10. We know the price elasticity of X from where we can find the price of X for 2009-10.

On similar lines we can calculate all the variables.

Clearly we can monitor the demand and price and note the pattern.

Hence, the correct option is (d).

Answered by Wizius Careers · View profile

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Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.An economist entered this city and calculated -Own price elasticity (PE) of product which was the change in demand of the product by change in price of the productIncome elasticity (IE) of product which was the change in demand of the product by change in the incomeCross price elasticity (CE) of product which was the change in demand of the product by change in price of the other productQ. What type of product has product X remained in average for its life cycle 2008-15?a)Luxury Goods- The increase in price leads to increase in demandb)Giffen Goods - The increase in income leads to decrease in demandc)Necessity Goods- The change in price has no much effect in demandd)Normal Goods - The demand increases with decrease in priceCorrect answer is option 'D'. Can you explain this answer?

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Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.An economist entered this city and calculated -Own price elasticity (PE) of product which was the change in demand of the product by change in price of the productIncome elasticity (IE) of product which was the change in demand of the product by change in the incomeCross price elasticity (CE) of product which was the change in demand of the product by change in price of the other productQ. What type of product has product X remained in average for its life cycle 2008-15?a)Luxury Goods- The increase in price leads to increase in demandb)Giffen Goods - The increase in income leads to decrease in demandc)Necessity Goods- The change in price has no much effect in demandd)Normal Goods - The demand increases with decrease in priceCorrect answer is option 'D'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.An economist entered this city and calculated -Own price elasticity (PE) of product which was the change in demand of the product by change in price of the productIncome elasticity (IE) of product which was the change in demand of the product by change in the incomeCross price elasticity (CE) of product which was the change in demand of the product by change in price of the other productQ. What type of product has product X remained in average for its life cycle 2008-15?a)Luxury Goods- The increase in price leads to increase in demandb)Giffen Goods - The increase in income leads to decrease in demandc)Necessity Goods- The change in price has no much effect in demandd)Normal Goods - The demand increases with decrease in priceCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directors: In a particular city only two products X and Y were sold. Their demand (D) and price (P) varied from 2008 to 2015 as the income (I) of the residents of the city.An economist entered this city and calculated -Own price elasticity (PE) of product which was the change in demand of the product by change in price of the productIncome elasticity (IE) of product which was the change in demand of the product by change in the incomeCross price elasticity (CE) of product which was the change in demand of the product by change in price of the other productQ. What type of product has product X remained in average for its life cycle 2008-15?a)Luxury Goods- The increase in price leads to increase in demandb)Giffen Goods - The increase in income leads to decrease in demandc)Necessity Goods- The change in price has no much effect in demandd)Normal Goods - The demand increases with decrease in priceCorrect answer is option 'D'. Can you explain this answer?.

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