When the price of Product E decreases 2%, this causes its quantity demanded to increase by 14% and the quantity demanded for Product F to increase 17%. relationship between E and F: cross-price elasticity between E and F:
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Introduction:
The readiness of customers to purchase a given amount of a specific product or service at a specific price is referred to as quantity desired. Quantity desired is an economic theory that refers to the number of things or services that consumers are willing to purchase at a given price. If all other factors stay constant, the amount required rises as the price falls. And vice versa: as the price rises, so does the amount requested.
The price of an item or service in a marketplace impacts the amount demanded by customers. Assuming that non-price elements are excluded from the equation, a higher price results in a lower amount demanded and a lower price results in a larger quantity desired. As a result, according to the law of demand, the price of a product and the quantity desired for that product have an inverse relationship.
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