1. If a 7 percent rise in the price of Pepsi increases the quantity of Coca Cola demanded by 4 percent and decreases the quantity of Pepsi demanded by 3 percent, calculate the cross price elasticity of demand for Coca Cola with respect to the price of Pepsi.

1. If a 7 percent rise in the price of Pepsi increases the quantity of Coca Cola demanded by 4 percent and decreases the quantity of Pepsi demanded by 3 percent, calculate the cross price elasticity of demand for Coca Cola with respect to the price of Pepsi.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. If a 7 percent rise in the price of Pepsi increases the quantity of Coca Cola demanded by 4 percent
and decreases the quantity of Pepsi demanded by 3 percent, calculate the cross price elasticity of
demand for Coca Cola with respect to the price of Pepsi.

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