Answer to Question #136951 in Macroeconomics for quack

Question

a) Why might it have been useful for Nintendo to calculate the cross-price elasticity of demand for its 16-bit systems and CD accessories?

Answer 1

It might have been useful for nintendo to calculate the cross-price elasticity of demand for it’s 16 bit systems and CD accessories in order to check the impact of change in price of 16-bit system over CD accessories and vice versa because an increase in price of one would lead to the increase in demand for the other good and a decrease in price of one would lead to decrease/decline in demand of other good as none of the rational consumer would like to pay a penny extra for the goods with perfect competition.