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)
Question : Assertion (A): Cross demand occurs when the amount of one good is changed because the price of another one has changed. Reason (R): Shifts in consumer spending cause shifts in demand.
Question : Assertion: Cross demand occurs when the amount of one good is changed because the price of another one has changed. Reason: Demand changes as a result of changes in consumer income.
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.
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): Once durable items are in high demand now, their demand can be delayed.
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