Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A→B→D→C
B
A→D→B→C
C
D→A→C→B
D
B→C→A→D
Understanding the Answer
Let's break down why this is correct
Answer
To analyze the relationship between two goods using cross price elasticity of demand, you first need to identify the goods in question. After that, you would measure how the quantity demanded of one good changes when the price of the other good changes. Once you have this information, you can calculate the cross price elasticity of demand to get a numerical value. Finally, based on the result of the elasticity, you can determine if the goods are substitutes, meaning they can replace each other, or complements, meaning they are often used together. For example, if the price of coffee rises and people buy less coffee but more tea, this suggests that coffee and tea are substitutes.
Detailed Explanation
First, you need to identify the goods you are studying. Other options are incorrect because This option suggests calculating before measuring; This option starts with calculation, which is not possible without identifying the goods first.
Key Concepts
Cross Price Elasticity of Demand
Substitutes and Complements
Consumer Behavior
Topic
Cross Price Elasticity of Demand
Difficulty
medium level question
Cognitive Level
understand
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