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If the percentage change in quantity demanded for a good is an increase of 25%,when the price of its substitute increases by 30%, the cross-price elasticity is?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the percentage change in quantity demanded for a good is an increase of 25%,when the price of its substitute increases by 30%, the cross-price elasticity is?

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Explain why the own-price elasticity is a pure number with no units and is negative.
If the price elasticity of supply is -0.5 and the price increases by 10%, what is the change in quantity supplied?
If the cross-price elasticity between coffee and cream is equal to -0.5, then a 10% increase in the price of coffee will cause: a 20% decrease in the quantity of cream demanded a 5% increase in the quantity of coffee demanded a 5% decrease in the quantity of coffee demanded a 5% decrease in the quantity of cream demanded a 20% decrease in the quantity of coffee demanded
Data from the Bureau of Labor Statistics shows that U.S. income increased by 10% while consumer data shows that the quantity demanded of organic lemonade drinks changed from 80 to 85. Compute the income elasticity for organic lemonade drinks, is organic lemonade a normal or an inferior good?
How do you determine which prices to use when finding the cross-price elasticity of two products?
Suppose the income elasticity of demand for gadgets is 1.2 and the price elasticity of demand for gadgets is -1.0. The price elasticity of supply of gadgets is 2.0. If consumer income increases by 1 percent, by what percent will the equilibrium price of gadgets increase?
Suppose the price elasticity of demand for coke is −3 and the cross-price elasticity of demand between coke and the price of Pepsi is 2.2. If the price of Pepsi decreases by 5%, what would happen to the demand for coke and what would have to happen to the price of coke to exactly offset the fall in the price of Pepsi and leave the quantity demanded of coke unchanged, respectively?
If an increase in the price of coffee at Starbucks by 30% raises sales of coffee at Cafe Beans by 30%. Calculate the cross-price elasticity of Starbucks coffee and Cafe Beans coffee. Are these two coffees complements or substitutes?
Is the sign of cross price elasticity of demand more important than the sign of the own price elasticity of demand, and why?
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To calculate an elasticity coefficient of demand, we need to Divide the percentage change in the price by the percentage change in the quantity demanded Multiply the percentage change in the quantity demanded by the percentage change in the price Know the slope of the demand curve Multiply the percentage change in the price by the percentage change in the quantity demanded
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