-Refer to the above table. Suppose the price of A increases from $10 to $12. What is the cross price elasticity of demand between A and C?

Question

Quizplus · Accepted Answer

The cross price elasticity of demand formula is (% change in quantity demanded of C) / (% change in price of A). Without specific quantities, we assume a positive cross elasticity indicating that A and C are substitutes. A positive value closest to zero, like +0.292, suggests a weak substitutability between A and C.

-Refer to the Above Table