Suppose that the amount of computer printers demanded increases by 20 percent when the price of personal computers falls by 10 percent. The cross price elasticity of demand between computer printers and personal computers is
A) 0.5.
B) -2.0.
C) -0.5.
D) 2.0.

Question

Quizplus · Accepted Answer

The cross price elasticity of demand is calculated as the percentage change in quantity demanded of one good divided by the percentage change in price of another good. Here, it is 20% / -10% = -2.0.

Suppose That the Amount of Computer Printers Demanded Increases by 20