explain cross price effect. How price of related effect the price for the commodity?
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Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a related commodity. It means, cross price effect originates from substitute goods and complementary goods.
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Gross price, or gross cost, is the total cost of acquiring a product. Net price is defined as gross price minus any monetary benefits you gain from the product.
The price of related goods is one of the other factors affecting demand. a. Related goods are classified as either substitutes or complements. ... An increase in the price of a good will increase demand for its substitute, while a decrease in the price of a good will decrease demand for its substitute
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