Question : When all other factors influencing demand are held constant, the cross elasticity of demand quantifies how much the quantity required of a good responds to changes in the .
Option 1: Income of the consumer
Option 2: Price of the commodity
Option 3: Price of the other commodity
Option 4: None of the above
Answer (1)
22nd Jan, 2024
Correct Answer: Price of the other commodity
Solution :
The cross elasticity of demand measures how much a good must be produced in reaction to changes in the price of the other item, holding all other demand-inducing variables constant.
Hence option c is the correct answer.
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