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16 Jul 2018, 04:20
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A
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Difficulty:
15%
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Question Stats:
80% (01:27) correct
20%
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wrong
based on 745
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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.
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.
16 Jul 2018, 04:30
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+1 for A.
A. A decrease in the demand for CD players results in a decrease in the demand for CD`s. --> Correct, CD players(main product) is directly proportional to CD(complement product), matches the reasoning
B. An increase in the demand for butter results in an increase in the demand for margarine. --> Incorrect, Similar entities
C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags. --> Incorrect, the opposite
D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones. --> Incorrect, entities not related
E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas. --> Incorrect, inverse proportion
Hence, A.
A. A decrease in the demand for CD players results in a decrease in the demand for CD`s. --> Correct, CD players(main product) is directly proportional to CD(complement product), matches the reasoning
B. An increase in the demand for butter results in an increase in the demand for margarine. --> Incorrect, Similar entities
C. A decrease in the demand for notebooks results in an increase in the demand for notebook bags. --> Incorrect, the opposite
D. An increase in the demand for toothpaste results in an increase in the demand for cellular phones. --> Incorrect, entities not related
E. A decrease in the demand for cable television results in an increase in the demand for satellite antennas. --> Incorrect, inverse proportion
Hence, A.
Bunuel
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.
