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A cross elasticity of demand coefficient of plus 2.5 indicates that the two products are substitutes?
Wiki User
∙ 10y ago
True or False: A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes.
Wiki User
∙ 10y ago
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What are significance of cross price elasticity?
Cross price elasticity measures the connection between the price of one product and the demand for another product, so it is used to determine whether products are complements, substitutes, or unrelated. For example, if the price of aluminum foil rises and, as a result, the demand for plastic wrap rises, then the cross price elasticity will be a positive and significant number and will support the assertion that these two products are close substitutes. Companies have even used this to defend against allegations of monopoly power, using the cross price elasticity number to demonstrate that they do not have a monopoly since consumers can easily switch to a good substitute.
What is the primary determinant of elasticity of supply?
A key determinant of the price elasticity pf supply is the availability of alternative products. The more choices consumers have, the more elasticity the price must have.
What is the difference between perishable and durable goods?
perishable products are inelastic products as they have less substitutes as compared to durable products which have more substiutes
What is importance of elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
What is importance of cross elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
What are significance of cross price elasticity?
Cross price elasticity measures the connection between the price of one product and the demand for another product, so it is used to determine whether products are complements, substitutes, or unrelated. For example, if the price of aluminum foil rises and, as a result, the demand for plastic wrap rises, then the cross price elasticity will be a positive and significant number and will support the assertion that these two products are close substitutes. Companies have even used this to defend against allegations of monopoly power, using the cross price elasticity number to demonstrate that they do not have a monopoly since consumers can easily switch to a good substitute.
What is close subsitute of a product?
A close substitute of a product is one which can easily replace it - eg margarine is a close substitute of butter. Two products are substitutes if they have a positive cross-elasticity - as the price of one increases, the quantity of the other increases
What is the primary determinant of elasticity of supply?
A key determinant of the price elasticity pf supply is the availability of alternative products. The more choices consumers have, the more elasticity the price must have.
Significance of elasticity of demand?
Elasticity of demand will help managers determine what behaviors affect customer's buying behavior. Price elasticity will tell managers whether they can change the price of products or not.
What is the difference between perishable and durable goods?
perishable products are inelastic products as they have less substitutes as compared to durable products which have more substiutes
What is importance of elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
What is Ramsay pricing?
it assigns costs based on the price elasticity of demand. het higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
What is importance of cross elasticity?
Cross elasticity of demand is the responsiveness of demand for one product to a change in the price of another product. It will help predicts how prices of products will act.
If products c and d are close substitutes an increase in the price of c will?
increase the demand for d
What has the author M Gutcho written?
M. Gutcho has written: 'Dairy products and eggs' -- subject- s -: Patents, Egg processing, Dairy processing 'Textured foods and allied products' -- subject- s -: Patents, Food substitutes, Meat substitutes, Flavoring essences
When was the Wool Products Labeling Act established?
The Wool Products Labeling Act was established in 1939 to protect consumers from unrevelaed presence of substitutes or mixtures of fiber. The act was then ammended in 1984. The Wool Products Labeling Act was established in 1939 to protect consumers from unrevelaed presence of substitutes or mixtures of fiber. The act was then ammended in 1984.
A number placed in front of a chemical formula in a chemical equation is called?
In a chemical Equation ,The reactants are on the left side of a chemical equation and the products are on the right side.The number in front of a chemical formula in a chemical equation is called atoms. They should be a balancing number on both the sides.
