Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Cross Elasticity
Cross elasticity of demand measures the degree of responsiveness of the quantity demanded of one good (B) to changes in the price of another good (A). It is measured as follows:
Ex = Percentage change in quantity demanded of B
Percentage change in Price of A.
This may be written mathematically as follows:
Ex = DQB/QB
DPA/PA
= AQB · PA
DPA QB
In the case of complementary goods, such as cars and petrol, a face in the price of one will bring about an increase in the demand for the other. Thus we are considering a cut in price (-) bringing about a rise in demand (+). This therefore means that for complements, the Ex is negative.
Conversely, substitute goods such as butter and margarine might be expected to have a positive Ex because a rise in price of one (+) will bring about a rise in the demand for the other (+).
The value of Ex may vary from minus infinity to plus infinity. Goods which are close to complements or substitutes will tend to exhibit a high cross-elasticity of demand. Conversely, when there is little or no relationship between goods then the Ex will be near zero.
is the sales maximization applicable
Explain about the Pricing analysis Microeconomic methods are employed to examine lots of pricing decisions. This includes transfer pricing, price discrimination, joint product
Intended or planned Investment Expenditure on investment depends on business expectations on the chance of making profits and on the availability of funds for the purchase of p
Limitations of Open Market OperationsLimitations For their success central bank open market operation assume that commercial banks in the country will expand their credit port
Arguments for Uneven Distribution of Income and Wealth The basic economic argument to justify large income inequality was the assumption that high personal and corporate income
WHY MANAGERS NEED TO KNOW ECONOMICS The influence of economics towards the performance of managerial duties and responsibilities is of major importance. The importance and cont
how it is revalent?
Consider an industry with a sole producer, a monopolist. The latter faces cost function C(Q)= Q/2 and aggregate (inverse) demand P(Q)=1 - Q (zero for Q> 1). Illustrate all your ans
Tomato Farm is selling tomatoes in a purely competitive market. Its output is 5000 bushels, which sell for $15 a bushel. At this level of output, the marginal cost is $15 bushel an
real GDP is increasingly criticized for its alleged failure to adequately measure the standard of living. To what extent do you think this criticism is valid?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd