Q.Explain Cross Elasticity of Demand.

Tea and coffee are substitute goods because one can replace the other, so the answer is (D).

Substitute goods satisfy the same want and can be used in place of each other, so a rise in the price of one raises the demand for the other. Tea and coffee are the textbook example of substitutes. The other pairs are complementary goods, used jointly: shoes with socks, pen with ink, and …

Substitute goods have positive cross price elasticity of demand, so the answer is (B).

In the BSEB Inter Class-12 Economics syllabus, substitute goods (e.g. tea and coffee) can be used in place of each other. When the price of one substitute rises, consumers shift to the other, so the demand for the other good increases. Price and quantity-demanded-of-the-other move in the same direction, giv …

Goods that can be used alternatively (in place of each other) are substitute goods, so the answer is (B).

In the BSEB Inter Class-12 Economics syllabus, substitute goods are goods that can be used in place of one another to satisfy the same want — for example tea and coffee, or Coke and Pepsi. Complementary goods (A), by con …

Every listed pair is a set of substitutes, not complements, so the answer is (D).

In the BSEB Inter Class-12 Economics syllabus, complementary goods are used together to satisfy a want (e.g. car and petrol, pen and ink). The pairs given are all substitutes — tea and coffee (A), Coke and Pepsi (B), and rice and wheat (C) can each be used in …

Tea and coffee are substitute goods, so the blank is 'substitute'.

Substitute goods are pairs that can be used in place of one another to satisfy the same want. For such goods the price of one and the demand for the other move in the same direction: if coffee becomes dearer, consumers sw …

Tea and sugar are complementary goods, consumed together.

Complementary goods are consumed jointly to satisfy a single want — e.g., tea is usually taken with sugar, so the two have an inverse (negative) cross-price relationship: if sugar becomes expensive, demand for tea-with-sugar (and hence tea itself) may also fall. This is the opposite of substitute goods (like tea and coffee), which can replace one another and have a direct (positive) cross-price relationship. Tea and sugar are neither luxury goods (goods dem …

In a monopoly the goods sold have no close substitutes.

Monopoly means a single firm supplies the entire market. A key defining feature is that its product has no close substitutes — there is no other good buyers can readily switch to. This absence of substitutes gives the …

Tea and coffee are substitutes because either can replace the other to satisfy the same want.

Substitute goods are those that can be used in place of one another — e.g., tea and coffee, as both serve the same purpose of being a hot beverage. If the price of tea rises, consumers switch toward coffee, so demand for coffee rises: substitutes show a direct (positive) relationship between the price of one and the demand for the other. By contrast, tea and sugar, shoes and socks, and pen and ink are all complem …

True — tea and coffee are substitutes, not complements.

Complementary goods are used jointly (e.g., car and petrol), whereas substitute goods can be used in place of one another. Tea and coffee can replace each other, so they are substitutes, not complements. Therefore the statement ' …