-In the above table, the cross price elasticity of demand (using averages) for Z with good X, when P_X increases from $12 to $15, is approximately equal to

Question

-In the above table, the cross price elasticity of demand (using averages) for Z with good X, when P_X increases from $12 to $15, is approximately equal to A) +1.03 B) +2.26. C) +0.44. D) -0.44.

Quizplus · Accepted Answer

Cross price elasticity of demand is calculated as the percentage change in quantity demanded of good Z divided by the percentage change in price of good X. Using the midpoint method, this results in approximately +0.44.

-In the Above Table, the Cross Price Elasticity of Demand