Suppose the cross-price elasticity of demand between raspberry jam and strawberry jam is 7.5. The interpretation of this result is Select one: O a. a 10% increase in the price of strawberry jam leads to a 0.75% increase in quantity demanded of raspberry jam. b. a 10% increase in the price of strawberry jam leads to a 75% decrease in quantity demanded of raspberry jam. c. a 10% increase in the price of strawberry jam leads to a 7.5% decrease in quantity demanded of raspberry jam. d. a 10% increase in the price of strawberry jam leads to a 75% increase in quantity demanded of raspberry jam. e. a 10% increase in the price of strawberry jam leads to a 7.5% increase in quantity demanded of raspberry jam. O O O

The cross-price elasticity of demand can be used to measure: O whether goods are complements, substitutes, or unrelated. O whether goods are normal or inferior. O More than one answer is correct. O whether goods are elastic or inelastic.

QUESTION 1   Quantity demanded Price Elasticity 1 100 $5 ? 2 80 $10 ? 3 60 $15 ? 4 40 $20 ? 5 20 $25 ? 5 10 $30 ?   Use the hypothetical demand schedule for movies above and  d etermine the price elasticity of demand at each quantity demanded using the point formula.   a.     Quantity demanded Price Elasticity 1 100 $5 -0.2 2 80 $10 -0.5 3 60 $15 -1.0 4 40 $20 -2.0 5 20 $25 -2.5 5 10 $30          -----       b.   Quantity demanded Price Elasticity 1 100 $5 ------ 2 80 $10 -0.2 3 60 $15 -0.5 4 40 $20 -1.0 5 20 $25 -2.0 5 10 $30 -2.5   c.   Quantity demanded Price Elasticity 1 100 $5 -0.2 2 80 $10 -0.5 3 60 $15 -1.0 4 40 $20 -2.0 5 20 $25 -2.5 5 10 $30 -3.0       d.…

Assume that the price elasticity of demand is 0.20. Given a 10 percent increase in price, we will see a O 2 percent decrease in the quantity demanded. O 20 percent increase in the quantity demanded. O 20 percent decrease in the quantity demanded. O 2 percent increase in thc quantity demanded,