Match the following types of elasticity with their corresponding definitions: Cross Elasticity of Demand | Measures how responsive the demand for a product is to changes in consume... Match the following types of elasticity with their corresponding definitions: Cross Elasticity of Demand | Measures how responsive the demand for a product is to changes in consumer income. Income Elasticity | An economic concept that measures how the price of one good affects the quantity demanded of another good. Price Elasticity of Supply | The responsiveness of a supply of a good or service after a change in its market price.
Understand the Problem
The question is asking us to match each type of elasticity with its correct definition. It involves understanding concepts from economics related to demand and supply.
Answer
Cross Elasticity of Demand measures how the price of one good affects the quantity demanded of another. Income Elasticity measures responsiveness to changes in consumer income. Price Elasticity of Supply is the responsiveness of supply to price changes.
Cross Elasticity of Demand: An economic concept that measures how the price of one good affects the quantity demanded of another good. Income Elasticity: Measures how responsive the demand for a product is to changes in consumer income. Price Elasticity of Supply: The responsiveness of a supply of a good or service after a change in its market price.
Answer for screen readers
Cross Elasticity of Demand: An economic concept that measures how the price of one good affects the quantity demanded of another good. Income Elasticity: Measures how responsive the demand for a product is to changes in consumer income. Price Elasticity of Supply: The responsiveness of a supply of a good or service after a change in its market price.
More Information
Cross elasticity of demand is particularly useful in assessing the relationship between substitutes and complements. Income elasticity of demand helps in analyzing how certain goods are classified (normal goods, inferior goods, etc.). Price elasticity of supply shows how quickly producers can respond to price changes.
Tips
A common mistake is confusing cross elasticity of demand with income elasticity since both involve quantities demanded, but they focus on different influencing factors (price of other goods vs. income changes).
Sources
- Cross Price Elasticity and Income Elasticity of Demand (article) - khanacademy.org
- Income Elasticity, Cross-Price Elasticity & Other Types of Elasticities - courses.lumenlearning.com
AI-generated content may contain errors. Please verify critical information
