Advertisements
Advertisements
Question
What do you mean by complements? Give examples of two goods which are complements of each other.
Advertisements
Solution
Those goods that are consumed together are called complementary goods. Example: Tea and sugar. If the price of sugar increases, then it will lead to a decrease in the demand for tea. If the price of tea increases, then it will reduce the demand for sugar.
The demand for a good moves in the opposite direction of the price of its complementary goods. That is,
If the price of tea (PT) increases, then the demand for sugar (DS) decreases.
If the price of sugar (PS) increases, then the demand for tea (DT) decreases.
APPEARS IN
RELATED QUESTIONS
Explain the factors determining the elasticity of demand.
As we move along a downward sloping straight line demand curve from left to right, price
an elasticity of demand : (choose the correct alternative)
(a) remains unchanged
(b) goes on falling
(c) goes on rising
(d) falls initially then rises
The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?
Price elasticity of demand of a good is (-)1. When its price per unit falls by one rupee, its de from 16 to 18 units. Calculate the price before a change
Discuss any four factors affecting price elasticity of demand.
State whether the following statement is True or False :
Concept of elasticity of demand is useful for finance minister.
What do you mean by an ‘inferior good’? Give some examples.
Explain price elasticity of demand.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Fill in the blank with appropriate alternatives given below:
Cross elasticity of demand is applicable to ____________ goods.
State whether the following statement is TRUE and FALSE.
Perfectly inelastic demand curve is parallel to the X axis.
Define the following concept:
Cross Elasticity of Demand
Define or explain the following concept:
Unitary Elastic Demand
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
State whether the following statement is true or false. Give valid reasons in support of your answer.
Luxury goods often have lower price elasticity of demand.
Answer the following question.
When the price of X doubles, its quantity demanded falls by 60 percent. Calculate its price elasticity of demand. What should be the percentage change in price so that its quantity demanded doubles?
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
mention any two examples of composite demand.
Who introduced the concept of elasticity of demand?
