3- Suppose the quantity demanded of good m decreases by 30% when the price of good kincreases by 40%.a- What is the cross-price elasticity of m's demand?b- What type of goods are m and p?c- Is m's demand elastic or inelastic with respect to price of p?4- Suppose the quantity demanded of sandwich changes from 50/day to 70/day in the schoolcanteen when the price of orange juice changes from 100 TL to 150 TL per liter.a- Calculate the cross price elasticity of sandwich and determine its sign.b- Are these two goods complements or substitutes?

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3- Suppose the quantity demanded of good m decreases by 30% when the price of good k increases by 40%. a- What is the cross-price elasticity of m's demand? b- What type of goods are m and p? c- Is m's demand elastic or inelastic with respect to price of p?

3- Suppose the quantity demanded of good m decreases by 30% when the price of good k increases by 40%. a- What is the cross-price elasticity of m's demand? b- What type of goods are m and p? c- Is m's demand elastic or inelastic with respect to price of p?

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

3- Suppose the quantity demanded of good m decreases by 30% when the price of good k
increases by 40%.
a- What is the cross-price elasticity of m's demand?
b- What type of goods are m and p?
c- Is m's demand elastic or inelastic with respect to price of p?
4- Suppose the quantity demanded of sandwich changes from 50/day to 70/day in the school
canteen when the price of orange juice changes from 100 TL to 150 TL per liter.
a- Calculate the cross price elasticity of sandwich and determine its sign.
b- Are these two goods complements or substitutes?

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Step 2: Calculate the cross-price elasticity of m's demand and state what type of goods they are

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