The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-_____ measures the percentage change in quantity demanded of a good caused by a given percentage change in the price of a related good.
A)Income elasticity of demand
B)Cross-price elasticity of demand
C)Advertising elasticity of demand
D)Price elasticity of demand
E)Point elasticity

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-_____ measures the percentage change in quantity demanded of a good caused by a given percentage change in the price of a related good.
A)Income elasticity of demand 
B)Cross-price elasticity of demand 
C)Advertising elasticity of demand 
D)Price elasticity of demand 
E)Point elasticity

Quizplus · Accepted Answer

Cross-price elasticity of demand measures the percentage change in quantity demanded of a good caused by a given percentage change in the price of a related good. In this case, we need to measure the responsiveness of demand for each product to the changes in the price of the other products, which is related to cross-price elasticity of demand. Therefore, option B is the correct answer. The other options do not directly relate to measuring the responsiveness of demand to changes in the price of related goods.

The Figure Given Below Shows the Demand Curves for Five