Answer to Question #230549 in Microeconomics for lovely

Question

State whether the Statement is TRUE or FALSE. Also write the reason (Without reason your answer will not accepted)

a)     If value of cross price elasticity is positive then it means there are less close substitutes are available of that product.

b)     In case of luxury products, the own price elasticity of demand is greater than one.

c)     If salaries of journalist go up then demand curve of newspaper will shift upward.

d)    When price elasticity of supply is greater than one it means supply curve is flatter.

Answer 1

a )False; this is owing to the fact that as the value of product B rises, interest for good A will rise as well. This suggests that items A and B are good replacements, and individuals are happy to shift to A if B becomes more priced. A good instance is the cost of milk.

b ) True, demand is flexible when the rate elasticity of need is more than one. This can be construed as clients being extremely price-conscious.

c) True since reporters will conduct more investigation on topics impacting a specific region, better publications will be produced.

d)True, it suggests a high level of pricing reactivity.