Q NO 1: ABC Ltd wanted to understand the relationship between goods X,Y and Z i.e whether they are subsitutes or complementary goods. Following information was available regarding goods X,Y and Z in terms of price and quantity demanded: a) There was no change in price of X, but price of Y decreased from Rs 250 to Rs 225 which led to fall in demand of X from 4000 units to 3500 units. Calculate cross elasticity of demand between X and Y and based on the results obtained comment on the relationship between two goods. b)There was no change in price of X, but price of Z decreased from Rs 240 to Rs 200 which led to increase in demand of X from 3500 units to 4000 units. Calculate cross elasticity of demand between X and Z and based on the results obtained comment on the relationship between two goods.
Q NO 1: ABC Ltd wanted to understand the relationship between goods X,Y and Z i.e whether they are subsitutes or complementary goods. Following information was available regarding goods X,Y and Z in terms of
a) There was no change in price of X, but price of Y decreased from Rs 250 to Rs 225 which led to fall in
b)There was no change in price of X, but price of Z decreased from Rs 240 to Rs 200
which led to increase in demand of X from 3500 units to 4000 units. Calculate cross elasticity of demand between X and Z and based on the results obtained comment on the relationship between two goods.
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