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If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these?
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If the cross elasticity is only slightly below zero which of the follo...
Answer:
Introduction:
Cross elasticity of demand measures the responsiveness of demand for one product to the change in the price of another product. If the cross elasticity is negative, it means that the two products are complements, and if it is positive, the two products are substitutes.
Slightly below zero:
If the cross elasticity is only slightly below zero, it means that the two products are weak complements. The demand for one product is not very responsive to the change in the price of another product.
Weak complements:
Weak complements are products that are often consumed together, but the demand for one product is not very dependent on the other. For example, peanut butter and jelly are weak complements. While they are often consumed together, the demand for peanut butter is not very responsive to the price of jelly.
Strong complements:
When the cross elasticity is negative and very high, the two products are strong complements. The demand for one product is highly dependent on the price of the other product. For example, printers and ink cartridges are strong complements. If the price of printers increases, the demand for ink cartridges will decrease.
Conclusion:
In conclusion, if the cross elasticity is only slightly below zero, the two products are weak complements. The demand for one product is not very responsive to the change in the price of another product. In contrast, if the cross elasticity is negative and very high, the two products are strong complements. The demand for one product is highly dependent on the price of the other product.
Introduction:
Cross elasticity of demand measures the responsiveness of demand for one product to the change in the price of another product. If the cross elasticity is negative, it means that the two products are complements, and if it is positive, the two products are substitutes.
Slightly below zero:
If the cross elasticity is only slightly below zero, it means that the two products are weak complements. The demand for one product is not very responsive to the change in the price of another product.
Weak complements:
Weak complements are products that are often consumed together, but the demand for one product is not very dependent on the other. For example, peanut butter and jelly are weak complements. While they are often consumed together, the demand for peanut butter is not very responsive to the price of jelly.
Strong complements:
When the cross elasticity is negative and very high, the two products are strong complements. The demand for one product is highly dependent on the price of the other product. For example, printers and ink cartridges are strong complements. If the price of printers increases, the demand for ink cartridges will decrease.
Conclusion:
In conclusion, if the cross elasticity is only slightly below zero, the two products are weak complements. The demand for one product is not very responsive to the change in the price of another product. In contrast, if the cross elasticity is negative and very high, the two products are strong complements. The demand for one product is highly dependent on the price of the other product.
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If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these?
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If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these?.
If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the cross elasticity is only slightly below zero which of the following is correct? (a) They are weak complements (b) Negative and very high they are strong complements (c) Both (a) and (b) (d) None of these?.
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