[amp_mcq option1=”change in the Utility of another commodity” option2=”change in the price of another commodity” option3=”change in the nature of another commodity” option4=”change in the size of another commodity” correct=”option2″]
The correct answer is: B. change in the price of another commodity.
Cross demand is the change in the quantity demanded of a good or service that results from a change in the price of another good or service. For example, if the price of coffee increases, the demand for tea may increase, as people will switch to tea as a substitute.
The other options are incorrect because:
- A. change in the Utility of another commodity. Utility is the satisfaction or benefit that a consumer receives from consuming a good or service. The utility of a good or service is not affected by the price of another good or service.
- C. change in the nature of another commodity. The nature of a good or service is its physical characteristics, such as its size, shape, color, and taste. The nature of a good or service is not affected by the price of another good or service.
- D. change in the size of another commodity. The size of a good or service is its physical quantity. The size of a good or service is not affected by the price of another good or service.