Question on: JAMB Economics - 2018
The effects on the demand for product A caused by a change in the price of product B is Called____________
A
Joint demand
B
cross-elasticity of demand
C
elasticity of supply
D
competitive demand
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Correct Option: A
The effect on the demand for product A caused by a change in the price of product B is called cross-elasticity of demand. Cross-elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.
- Joint demand refers to the demand for two or more goods that are used together (e.g., cars and gasoline).
- Elasticity of supply measures the responsiveness of the quantity supplied of a good to a change in its price.
- Competitive demand is a term that is sometimes used to refer to goods that are substitutes, but it is not a standard economic term.
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