Question : Assertion (A): Change in quantity demanded of one commodity due to a change in the price of another commodity is cross demand.
Reason (R): Changes in consumer income leads to a change in demand.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer:
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
Solution :
Cross elasticity describes the change in demand for a good as a result of the price of a substitute. Cross elasticity, for instance, refers to the variation in tea demand as a result of changes in coffee price.
The income effect describes how consumer demand for goods and services changes as a function of income. In general, people will start to desire more items as their money increases.
Hence both are different concepts so b is the correct answer.
