Your local bakery gives you information on consumer purchasing habits for muffins and cupcakes. It tells you that, when the price of a muffin is $1, people buy 55 cupcakes. When the price of a muffin is raised to $2, cupcake purchases go up to 65 cupcakes. The cross-price elasticity of demand is:
A) 0.50.
B) 0.25.
C) 0.67.
D) 2.00.
E) 4.00.

Question

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The Answer of Your local bakery gives you information on consumer purchasing habits for muffins and cupcakes. It tells you that, when the price of a muffin is $1, people buy 55 cupcakes. When the price of a muffin is raised to $2, cupcake purchases go up to 65 cupcakes. The cross-price elasticity of demand is:
A) 0.50.
B) 0.25.
C) 0.67.
D) 2.00.
E) 4.00.

Your Local Bakery Gives You Information on Consumer Purchasing Habits