If the price of jelly increases 10 percent and the amount of peanut butter purchased decreases 20 percent,then the cross-price elasticity of these goods is:
A) 0.5.
B) 2.
C) 0.5
D) 2

Question

Quizplus · Accepted Answer

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, indicating a strong negative relationship.

If the Price of Jelly Increases 10 Percent and the Amount