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Suppose Tinsel Town Videos Lowers the Price of Its Movie

Question 166

Multiple Choice

Suppose Tinsel Town Videos lowers the price of its movie club membership by 10 percent and as a result, CineArts Videos experienced a 16 percent decline in its movie club membership.What is the value of the cross-price elasticity between the two movie club memberships?


A) -1.6
B) -0.625
C) 0.625
D) 1.6

Correct Answer:

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