Question

3. outline the important determinants of demand for automobiles. How are cross and income elasticity of demand relevant to marutis managerial decisions?

Answer 1

The three determinants of price elasticity of demand are:

• The availability of close substitutes. ...
• The importance of the product's cost in one's budget. ...
• The period of time under consideration.

Answer 2

Answer:

Cross elasticity is used to measure the responsiveness of the quantity that is demanded for a commodity in order to change the price of another commodities.

• Both cross and income elasticity are of great relevancy of the Maruti's managerial decision making as it helps for formulating better price strategy.