-In the above table, the cross price elasticity of demand for good B with good A when PA rises from $10 to $12 is
A) +0.29.
B) +1.83.
C) +0.58.
D) -0.58.

Question

-In the above table, the cross price elasticity of demand for good B with good A when PA rises from $10 to $12 is
A) +0.29. 
B) +1.83. 
C) +0.58. 
D) -0.58.

Quizplus · Accepted Answer

Cross price elasticity of demand is calculated as the percentage change in quantity demanded of good B divided by the percentage change in price of good A. If the calculation results in +0.58, it indicates that the goods are substitutes.

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