Correct option is B
The correct answer is: (B) Cross Elasticity of Demand
Explanation:
Cross Elasticity of Demand measures how the demand for one good (Tea) responds to changes in the price of a related good (Coffee). If Coffee's price rises, people might substitute it with Tea, leading to a change in Tea's demand.
Information Booster:
Cross Elasticity of Demand is positive for substitute goods (like Tea and Coffee) and negative for complementary goods (like Tea and Sugar).
Additional Knowledge:
- Direct Demand: Refers to the demand for goods directly consumed, such as food or clothing.
- Composite Demand: Occurs when a commodity is demanded for multiple uses, like milk for drinking and making curd.
- Indirect Demand: Refers to the demand for factors of production used to produce goods, such as the demand for steel in the automobile industry.
English
100 Questions
100 Marks
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