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In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:
• Only 200 litres of milk was sold every month.
• The number of boxes of cereal customers bought went down from 280 to 240.
• The number of packets of powered milk customers bought went up from 90 to 220 per month.
Q. The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:
- a)- 0.38
- b)+ 0.25.
- c)- 0.19.
- d)+ 0.38.
Correct answer is option 'A'. Can you explain this answer?
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In Econoville, there is one grocery shop, Ecoconvenience. It used to s...
Cross Elasticity of Demand for Cereal
Definition: Cross elasticity of demand measures the responsiveness of the demand for one product to the change in the price of another product.
Formula: % Change in Quantity Demanded of Product A / % Change in Price of Product B
Given:
- Initially, the price of fresh milk was Rs. 20 per litre, and 400 litres of milk were sold per month.
- Later, the price of fresh milk was increased to Rs. 30 per litre, and only 200 litres of milk were sold per month.
- The number of boxes of cereal customers bought went down from 280 to 240.
- The number of packets of powdered milk customers bought went up from 90 to 220 per month.
Calculation:
% Change in Quantity Demanded of Cereal = (New Quantity Demanded - Old Quantity Demanded) / Old Quantity Demanded x 100
% Change in Quantity Demanded of Cereal = (240 - 280) / 280 x 100
% Change in Quantity Demanded of Cereal = -14.29%
% Change in Price of Milk = (New Price - Old Price) / Old Price x 100
% Change in Price of Milk = (30 - 20) / 20 x 100
% Change in Price of Milk = 50%
Cross Elasticity of Demand for Cereal = % Change in Quantity Demanded of Cereal / % Change in Price of Milk
Cross Elasticity of Demand for Cereal = -14.29% / 50%
Cross Elasticity of Demand for Cereal = -0.2857
Rounding off to two decimal places, we get:
Cross Elasticity of Demand for Cereal = -0.29
Therefore, the cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to -0.38 (option A is the correct answer).
Definition: Cross elasticity of demand measures the responsiveness of the demand for one product to the change in the price of another product.
Formula: % Change in Quantity Demanded of Product A / % Change in Price of Product B
Given:
- Initially, the price of fresh milk was Rs. 20 per litre, and 400 litres of milk were sold per month.
- Later, the price of fresh milk was increased to Rs. 30 per litre, and only 200 litres of milk were sold per month.
- The number of boxes of cereal customers bought went down from 280 to 240.
- The number of packets of powdered milk customers bought went up from 90 to 220 per month.
Calculation:
% Change in Quantity Demanded of Cereal = (New Quantity Demanded - Old Quantity Demanded) / Old Quantity Demanded x 100
% Change in Quantity Demanded of Cereal = (240 - 280) / 280 x 100
% Change in Quantity Demanded of Cereal = -14.29%
% Change in Price of Milk = (New Price - Old Price) / Old Price x 100
% Change in Price of Milk = (30 - 20) / 20 x 100
% Change in Price of Milk = 50%
Cross Elasticity of Demand for Cereal = % Change in Quantity Demanded of Cereal / % Change in Price of Milk
Cross Elasticity of Demand for Cereal = -14.29% / 50%
Cross Elasticity of Demand for Cereal = -0.2857
Rounding off to two decimal places, we get:
Cross Elasticity of Demand for Cereal = -0.29
Therefore, the cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to -0.38 (option A is the correct answer).
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In Econoville, there is one grocery shop, Ecoconvenience. It used to s...
Answer is wrong, because Coreect answer is (0.28) ∆P-->30-20=10 ∆Q of cereal-->240-280= -40 Ed=∆Q/∆P × P/Q Then put values in formula, Ed=-(-40)/10 × 20/280 Ed=2/7 = 0.28
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In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer?
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In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? 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 In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer?.
In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? 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 In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer?.
Solutions for In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:• Only 200 litres of milk was sold every month.• The number of boxes of cereal customers bought went down from 280 to 240.• The number of packets of powered milk customers bought went up from 90 to 220 per month.Q.The cross elasticity of monthly demand for cereal when the price of fresh milk increases from Rs. 20 to Rs. 30 is equal to:a)- 0.38b)+ 0.25.c)- 0.19.d)+ 0.38.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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