Question

What is the cross-elasticity of supply of one of the goods or services that your company...

What is the cross-elasticity of supply of one of the goods or services that your company provides? Why? How does your answer relate with another student ...
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Let's take the example of a car manufacturing company.

Now, if the price of steel increases, this means that the cost of production of cars will increase. This would affect the supply of cars. This is an example of cross-price elasticity wherein the changes in the supply of cars gets affected by the changes in the price of steel. Cars can have relatively high elasticity or low elasticity towards changes in price levels of steel. It completely depends on how much steel is used in manufacturing that particular car. If a lot of steel is used in the manufacturing of car, then the cross-price elasticity will be relatively higher as against when a little amount of steel is used in its manufacturing.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. The price elasticity of demand for iphone 6 is 1.2. Apple wants to increase its...
1. The price elasticity of demand for iphone 6 is 1.2. Apple wants to increase its total revenue. Would you recommend that Apple raise or lower the price of iphone 6? Explain your answer. 2. The demand of gasoline is more inelastic in the short run than in the long run. Why? Give examples that illustrate why the demand of gasoline in the long run is not inelastic. 3. Choose one of the products or services that your company provides,...
If two goods are substitutes for one another, what must be true about their cross price...
If two goods are substitutes for one another, what must be true about their cross price elasticity of demand?
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods...
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods b. positive for complements c. positive for substitutes d. positive for normal goods e. never positive
The following table lists the cross elasticity of demand for several goods, where the percentage quantity...
The following table lists the cross elasticity of demand for several goods, where the percentage quantity change is measured for the first good of the pair, and the percentage price change is measured for the second good. Good Cross elasticity of demand Air-conditioning units and kilowatts of electricity -0.34 Coke and Pepsi 0.63 High-fuel-consuming SUVs and gasoline -0.28 McDonald’s burgers and Harvey burgers 0.82 Butter and Margarine 1.54 1.Explain the sign of each of the cross elasticities. What does it...
If the cross-price elasticity for two goods is equal to −4, then A) the goods are...
If the cross-price elasticity for two goods is equal to −4, then A) the goods are normal goods. B) the goods are inferior goods. C) the goods are substitutes. D) the goods are complements. If the supply curve for housing is perfectly inelastic, a decrease in demand will cause the equilibrium price to: A) rise and the equilibrium quantity to fall. B) rise and the equilibrium quantity to stay the same. C) fall and the equilibrium quantity to fall. D)...
If goods X and Y are substitute goods, then the cross-price elasticity of the price of...
If goods X and Y are substitute goods, then the cross-price elasticity of the price of good Y on the demand for good X is: Select one: a. positive b. zero c. undefined d. negative
15) If the cross-price elasticity of demand between two goods is positive, we can assume that...
15) If the cross-price elasticity of demand between two goods is positive, we can assume that the two goods in question are: A) complements. B) substitutes. C) inferior goods. D) totally unrelated to one another. Answer: 16) Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers? A) Direct consumer surveys. B) Expert opinion. C) Analysis of historical data. D) Test marketing and price experiments....
Calculate the cross price elasticity of demand (CPED), specify if the goods are complements or substitutes...
Calculate the cross price elasticity of demand (CPED), specify if the goods are complements or substitutes and justify why: a) A 10% increase in the price of pizza lead to a 12% decrease in the quantity demanded of beer. b) A 15% increase in the price of apples lead to a 30% increase in the quantity demanded of oranges. NOTE: This is a FILE UPLOAD question. Work your answer on a word or excel file, or write down your solution...
40) The cross elasticity of demand for butter and margarine is likely to be A) positive...
40) The cross elasticity of demand for butter and margarine is likely to be A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods. 41) If an increase in the price of green ketchup increases the demand for red ketchup, then A) red and green ketchup are substitutes. B) red and green ketchup are normal goods. C) the cross...
The cross-price elasticity of demand measures the absolute change in the quantity demanded of one good...
The cross-price elasticity of demand measures the absolute change in the quantity demanded of one good divided by the absolute change in the price of another good. percentage change in the price of one good divided by the percentage change in the quantity demanded of another good. percentage change in the quantity demanded of one good in one location divided by the price of the same good in another location. percentage change in the quantity demanded of one good divided...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT