suppose that the price of product a increased from $9 to $11 and the quantity demanded of product b increased from 192 to 208. what can be said about the products? question 70 options: a) they both have elastic demands. b) they both have inelastic demands. c) they are inferior products. d) they are complementary products. e) they are substitute products.
To determine the elasticity of demand for a product, we analyze the relationship between price and quantity demanded. From the given information, we can see that as the price of product A increased, the quantity demanded of product B also increased. This suggests that the two products are likely substitutes.
Option e) They are substitute products.
To determine the nature of the products, we need to analyze the relationship between price and quantity demanded.
For product A, the price increased from $9 to $11. If the quantity demanded decreases as a result of the price increase, the demand is considered elastic. If the quantity demanded remains relatively unchanged or decreases slightly, the demand is considered inelastic.
For product B, the quantity demanded increased from 192 to 208. If the increase in quantity demanded is substantial, it suggests an elastic demand. If the increase in quantity demanded is relatively small, it suggests an inelastic demand.
Based on the information provided:
- Product A had a price increase, but we do not know how it affected the quantity demanded. Therefore, we cannot determine the elasticity or inelasticity of its demand.
- Product B had an increase in quantity demanded, indicating an elastic demand.
Therefore, the correct answer is:
a) They both have elastic demands.