Assume that a retailer sells 500 units of Yoplait Yogurt per day at a price of $0.40/unit. You, as an economic analyst, estimate that the cross-price elasticity between Yoplait Yogurt and Dannon Yogurt is 0.8. If the retailer raises the price of Dannon Yogurt from $0.50/unit to $0.60/unit, how would sales of Yoplait Yogurt be affected?

A) Sales of Yoplait Yogurt would rise by 80 units.
B) Sales of Yoplait Yogurt would not be affected at all.
C) Sales of Yoplait Yogurt would rise by 40 units.
D) None of the above.


A) Sales of Yoplait Yogurt would rise by 80 units.

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