1. Suppose the price of peanut butter rises from $2 to $4 per jar. Instructions: Round your answer to four decimal places and include a negative sign if appropriate. a. The quantity of jelly purchased decrease from 20 million jars to 15 million jars. Find the cross- price elasticity of demand between peanut butter and jelly using the mid-point method. b. Are the goods are complimentary or substitutes? c. The quantity of jelly purchased rises from 15 million jars to 20 million jars. Find the cross-price elasticity of demand between peanut butter and jelly using the mid-point method. d. Are the goods complimentary or substitutes?

1. Suppose the price of peanut butter rises from $2 to $4 per jar. Instructions: Round your answer to four decimal places and include a negative sign if appropriate. a. The quantity of jelly purchased decrease from 20 million jars to 15 million jars. Find the cross- price elasticity of demand between peanut butter and jelly using the mid-point method. b. Are the goods are complimentary or substitutes? c. The quantity of jelly purchased rises from 15 million jars to 20 million jars. Find the cross-price elasticity of demand between peanut butter and jelly using the mid-point method. d. Are the goods complimentary or substitutes?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...

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