cross elasticity between a battery and a car would be
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Hi.
We know that the Cross elasticity is the ratio between the % change in demand of the quantity to the % change in price of another product.
It is represented by Exy.
If there are two products such as Battery (b) and the car(c), the the Cross elasticity ⇒
Change in demand of the Battery/ Change in Price of the car.
Cross Elasticity will be greater than 1, equals to 1 or less than.
Reason for that ⇒
It will be more as Due to the New technology Peoples are more aware about the Battery and they use it then the Price of the car.
Although it can be less than 1 as the Price of the Car has been increased in these days.
Finally, This ratio sometimes can be greater than 1 or less than 1. Because it depends upon the Markets and the Peoples. Sometimes when the Price of the car is more then Cross elasticity is less than 1, and when Battery is more than the Cross elasticity is greater than 1.
Hope it helps.
We know that the Cross elasticity is the ratio between the % change in demand of the quantity to the % change in price of another product.
It is represented by Exy.
If there are two products such as Battery (b) and the car(c), the the Cross elasticity ⇒
Change in demand of the Battery/ Change in Price of the car.
Cross Elasticity will be greater than 1, equals to 1 or less than.
Reason for that ⇒
It will be more as Due to the New technology Peoples are more aware about the Battery and they use it then the Price of the car.
Although it can be less than 1 as the Price of the Car has been increased in these days.
Finally, This ratio sometimes can be greater than 1 or less than 1. Because it depends upon the Markets and the Peoples. Sometimes when the Price of the car is more then Cross elasticity is less than 1, and when Battery is more than the Cross elasticity is greater than 1.
Hope it helps.
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