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Demand levels for some categories of products are closely interdepende

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Demand levels for some categories of products are closely interdepende  [#permalink]

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New post 16 Jul 2018, 03:20
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Demand levels for some categories of products are closely interdependent. When one type of a product can serve as a complement for another product, the levels of demand for these goods are positively related. An increase in the demand for one product usually increases the demand for its complementary product. Similarly, a decrease in the demand for one good causes a decrease in the demand for its complementary product.

Which of the following statements provides an example of the relationship between product demands described above?


A. A decrease in the demand for CD players results in a decrease in the demand for CD`s.

B. An increase in the demand for butter results in an increase in the demand for margarine.

C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags.

D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones.

E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas.

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Demand levels for some categories of products are closely interdepende  [#permalink]

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New post Updated on: 16 Jul 2018, 04:46
Bunuel wrote:
Demand levels for some categories of products are closely interdependent. When one type of a product can serve as a complement for another product, the levels of demand for these goods are positively related. An increase in the demand for one product usually increases the demand for its complementary product. Similarly, a decrease in the demand for one good causes a decrease in the demand for its complementary product.

Which of the following statements provides an example of the relationship between product demands described above?


A. A decrease in the demand for CD players results in a decrease in the demand for CD`s.

B. An increase in the demand for butter results in an increase in the demand for margarine.

C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags.

D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones.

E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas.


Option A. A decrease in the demand for CD players results in a decrease in the demand for CD`s. -------Correct +ve correlation. CD's cannot be enjoyed without CD-player

Option B. An increase in the demand for butter results in an increase in the demand for margarine. --------In this case, logically butter and margarine are interchangeable in most cases. The relationship is supposed to be -ve ly correlated.

Option C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags. -------Not logical .The relationship is supposed to be +ve ly correlated.

Option D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones. -----These two events are not related. They are independent.

Option E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas. -------Not logical .The relationship is supposed to be +ve ly correlated.
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Originally posted by u1983 on 16 Jul 2018, 04:28.
Last edited by u1983 on 16 Jul 2018, 04:46, edited 1 time in total.
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Re: Demand levels for some categories of products are closely interdepende  [#permalink]

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New post 16 Jul 2018, 04:34
Products need to serve as complement to each other. Butter and margarine are interchangeable and complement, rest of the categories are not.

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Re: Demand levels for some categories of products are closely interdepende  [#permalink]

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New post 16 Jul 2018, 04:44
Demand levels for some categories of products are closely interdependent. When one type of a product can serve as a complement for another product, the levels of demand for these goods are positively related. An increase in the demand for one product usually increases the demand for its complementary product. Similarly, a decrease in the demand for one good causes a decrease in the demand for its complementary product.

Which of the following statements provides an example of the relationship between product demands described above?

RELATIONSHIP:- demands interdependent and increase in demand of one leads to increase in demand of other and similarly they decrease together

A. A decrease in the demand for CD players results in a decrease in the demand for CD`s.
CDs are played in CD player, so interdependent and correctly represents the relationship...CORRECT

B. An increase in the demand for butter results in an increase in the demand for margarine.
they are not interdependent. rather both are substitute for each other

C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags.
the relationship is not positively related .. Increase and decrease

D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones.
Two totally unrelated objects

E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas.
the relationship is not positively related .. Increase and decrease

A
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Re: Demand levels for some categories of products are closely interdepende  [#permalink]

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New post 16 Jul 2018, 10:14
Demand levels for some categories of products are closely interdependent. When one type of a product can serve as a complement for another product, the levels of demand for these goods are positively related. An increase in the demand for one product usually increases the demand for its complementary product. Similarly, a decrease in the demand for one good causes a decrease in the demand for its complementary product.

Which of the following statements provides an example of the relationship between product demands described above?


A. A decrease in the demand for CD players results in a decrease in the demand for CD`s. - Correct - CDs and CD players are positively related

B. An increase in the demand for butter results in an increase in the demand for margarine. - Incorrect - in general , a person consumes only one of these

C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags. - Incorrect - not positive relation since one has decreased whereas the other has increased

D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones. - Incorrect

E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas. - Incorrect - same as C

Answer A
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Re: Demand levels for some categories of products are closely interdepende &nbs [#permalink] 16 Jul 2018, 10:14
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