Question : If the quantity of good A required increases as the price of good B rises, then
A) A and B are substitutes.
B) A and B are complements.
Option 1: Only A correct
Option 2: Only B correct
Option 3: Both are correct
Option 4: None of the above.

Question

Question : If the quantity of good A required increases as the price of good B rises, then
A) A and B are substitutes.
B) A and B are complements.

Option 1: Only A correct

Option 2: Only B correct

Option 3: Both are correct

Option 4: None of the above.

Team Careers360 · Accepted Answer

Correct Answer: Only A correct

Solution : The demand for good A will rise as the price of item B rises if the cross elasticity of demand is positive. This indicates that products A and B are substitute goods.
Hence option a is the correct answer.

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Question : If the quantity of good A required increases as the price of good B rises, then A) A and B are substitutes. B) A and B are complements.Option 1: Only A correctOption 2: Only B correct Option 3: Both are correctOption 4: None of the above.

Related Questions

Question : The cross-price elasticity of demand is used to determine whether:- a: Product is an inferior or normal good b: A product is a necessity or a luxury c: Two products are substitutes or complements

Question : The law of demand states that:

Question : Elasticity is quantified by A: Geometrical Method B: Arithmetical Method

Question : Assertion: When the price of a good decrease, its quantity demanded increases. Reason: The law of demand states an inverse relationship between price and quantity demanded.

Question : The following are the primary causes of poverty in India: A: Population Pressure B: Inadequate capital formation and infrastructure

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Question : If the quantity of good A required increases as the price of good B rises, then
A) A and B are substitutes.
B) A and B are complements.
Option 1: Only A correct
Option 2: Only B correct
Option 3: Both are correct
Option 4: None of the above.

Question : The cross-price elasticity of demand is used to determine whether:-
a: Product is an inferior or normal good
b: A product is a necessity or a luxury
c: Two products are substitutes or complements

Question : Elasticity is quantified by
A: Geometrical Method
B: Arithmetical Method

Question : Assertion: When the price of a good decrease, its quantity demanded increases.
Reason: The law of demand states an inverse relationship between price and quantity demanded.

Question : The following are the primary causes of poverty in India:
A: Population Pressure
B: Inadequate capital formation and infrastructure