Question

you may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. this is particularly true when consumers can find these goods in close proximity to each other. for example, prices are often the same at gas stations that are on opposite sides of the street. prices are also generally the same for products next to each other on the same grocery store shelf.

Answer 1

You may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. This is particularly true when consumers can find these goods in close proximity to each other. For example, prices are often the same at gas stations that are on opposite sides of the street. Prices are also generally the same for products next to each other on the same grocery store shelf. The aforementioned examples are goods that are likely to be Substitutes. You would expect the value of the cross-price elasticity to be Large because the opportunity cost of getting information on price is low.

What is cross-price?

Cross-price elasticity quantifies how sensitive a product's demand is to a change in the price of the related product. Many products on the market have relationships with one another. This could imply that a product's price change could have a positive or negative impact on the demand for another product.

There are three categories of product relationships to look at when describing cross-price elasticity.

First, there are products that are closely related to one another and are occasionally referred to as substitutes. In the market, these products compete for the same consumers.

There are also goods that are consumed in combination. Demand for one product has a direct impact on how much-related products are consumed. They are referred to as complementary products.

Products in the final category are completely unrelated to one another. The consumption of these goods is unaffected by one another.

Business owners can strategically compete in their industry or stock their inventories by clearly understanding the ideas behind product relationships. For instance, lowering the cost of printers might result in more people buying toner and ink. The more printers people purchase, the more money is made by selling related goods.

Thus, cross-price is related to the sensitivity of demand for a product.

For more information on cross price, refer to the given link:

brainly.com/question/14469117

#SPJ4

Complete Question:

You may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. This is particularly true when consumers can find these goods in close proximity to each other. For example, prices are often the same at gas stations that are on opposite sides of the street. Prices are also generally the same for products next to each other on the same grocery store shelf. The aforementioned examples are goods that are likely to be _________ You would expect the value of the cross-price elasticity to be_________ because the opportunity cost of getting information on price is low.