Question : Assertion (A): Cross demand is when the quantity of one good is changed because the price of another good has changed.
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.
Changes in consumer income lead to a change in demand.
Hence Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
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