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Which of the following statements are true or false?Justify your answer with appropriate explanations.
a) An increase in the price of ham decreases the consumption of cheese.
An increase in the price of ham increases the consumption of salami.
Hence ham and cheese are substitutes and ham and salami are complements.
b) If price elasticity of demand (PED) is -1.7 , it is feasible that a company cuts the price by 5% in order to generate enough total revenue.
a) An increase in the price of ham decreases the consumption of cheese.
An increase in the price of ham increases the consumption of salami.
Hence ham and cheese are substitutes and ham and salami are complements.
b) If price elasticity of demand (PED) is -1.7 , it is feasible that a company cuts the price by 5% in order to generate enough total revenue.
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