Question : Assertion (A): Cross demand is positive in the case of substitute goods.
Reason (R): A drop in demand for particular commodity results from an increase in the price of substitute commodities.
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: Assertion (A) is true but Reason (R) is False
Solution : Because demand for one good rise when the price for the substitute good rises, the cross elasticity of demand for substitute goods is always positive. In contrast, the demand for complementary items has a negative cross-elasticity. Hence option c is the correct answer.
Question : Assertion (A): Cross demand is positive in the case of substitute goods. Reason (R): A drop in demand for particular product results from a rise in the price of substitute goods.
Question : Assertion (A): Demand elasticity is higher for durable commodities. Reason (R): Demand for durable goods can be postponed once they are demanded at present.
Question : Assertion (A): Complementary goods have joint demand. Reason (R): In order to fulfill a specific need, complementary commodities are simultaneously desired.
Question : Assertion (A): Demand elasticity is higher for durable commodities. Reason (R): Once durable items are in high demand now, their demand can be delayed.
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.
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