When the price of pens went from $1 to $1.50, the quantity demanded of pencils changed from 50 to 75 a day. The cross-price elasticity of demand for pencils (using the initial value formula) is:
A. 1.
B. 0.4.
C. 0.2.
D. -0.2.
Answer: A
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A) supply; right B) supply; left C) demand; left D) demand; right