Calculate the cross-price elasticity of demand between computers and printers, where a 10 percent decrease in the price of computers results in a 15 percent increase in the demand for printers


In this case, the cross-price elasticity of demand is -1.5.

Cross-price elasticity of demand = (% in the demand for good A) / (% in the price of B) = +15% -10% = -1.5

Economics

You might also like to view...

A decrease in the price level results in a(n) ________ in household consumption spending and a(n) ________ in investment spending

A) increase; increase B) decrease; increase C) increase; decrease D) decrease; decrease

Economics

A company currently sells 10,00 . units at $9/unit and makes $20,00 . accounting profit. Variable costs currently stand at $6 per unit. By how much would variable costs have to increase before the company makes zero accounting profits?

a. $1.00 b. $2.00 c. $3.00 d. $4.00

Economics

The United States has less income inequality than most other developed countries

a. True b. False Indicate whether the statement is true or false

Economics

If Amber is willing to work additional hours if her wage rate increases, the substitution effect must outweigh the income effect.

Answer the following statement true (T) or false (F)

Economics