Suppose the price of good A increases by 50%, causing quantity demanded for good B to increase by15% The cross elasticity of demand isand goods A and B areO 0.3; complementsO 05: complementsO 0.3: substitutesO 0.5: substitutes

In this question we have to find out the cross elasticity of demand with the help of the above…

Suppose the price of good A increases by 50%, causing quantity demanded for good B to increase by and goods A and B are 15% The cross elasticity of demand is O 03 complements O as; complements O 03: substitutes O 0.5: substitutes

Suppose the price of good A increases by 50%, causing quantity demanded for good B to increase by and goods A and B are 15% The cross elasticity of demand is O 03 complements O as; complements O 03: substitutes O 0.5: substitutes

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 2WNG: As the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to...

See similar textbooks

Related questions

Q: Suppose the income elasticity of demand for toys is +2.00. This means that: a 10 percent increase in…

A: Income elasticity of demand refers to how the quantity of demand for goods changes when the income…

Q: If the cross-price elasticity of demand for Widgets and Twingers is negative, this means the two…

A: An inferior good is the one whose demand decreases with the increase in income and with the fall in…

Q: The cross-price elasticity of demand between good X and good Y is-3. Given this information, which…

A: Below is the given information: The cross elasticity between the commodity X and Y = - 3

Q: QUESTION 6 The demand for a product is inelastic with respect to price if: O a drop in price is…

A: Elasticity is a proportion of a variable's affectability to an adjustment of another variable, most…

Q: Consider the demand function Qd = 1000 − 4P2+ 6P*+ 5Y which describes how the demand Qd for a good…

A: Own price elasticity of demand is defined as the percentage change in demand due to percentage…

Q: Assume your demand for “Ipek su” water increases from 1 bottle to 3 when “Sirab su” increases the…

A: a) Cross price elasticity is given as EC= % change in quantity of good X/ % change in price of good…

Q: e price of ice cream inereases from $8 to $10 a gallon, quantity demanded of frozen yogurt increases…

A: Cross price elasticity of demand depicts how much consumer responds with the change in price of…

Q: Good U has a price elasticity of demand of 2.5 and Good Y has a price elasticity of demand of 0.7.…

A: Answer to the question is as follows :

Q: If a change of 15% in price of good X, results in a change in demand for good Y of 5%, then: (a) The…

A: Elasticity of demand is used to measure the responsiveness of the quantity demanded of a good due to…

Q: X becomes more expensive to produce, increasing its price. As a result, the demand for good Y…

A: Cross elasticity of demand measures the responsive of percentage change in demand due to some…

Q: If you learn that the income elasticity on movies and restaurants are both 1.8 then you can conclude…

A: Answer: The income elasticity of demand for luxurious goods is greater than one. If the income of…

Q: 2) Use the information in the table below to identify the type of cross elasticity relationship…

A: Elasticity refers to the change in the reaction of people in the economy to changes in price and…

Q: 4. As the price of good X increases from $20 to $24, the quantity demanded of good Y increases from…

A: Cross elasticity of demand measures the responsiveness of changes in the demand for one good caused…

Q: Suppose the demand curve for a product is: Q = 90 – 6P + 4Ps, where P is the price of the product…

A: The cross-price elasticity of demand measures the relationship between the quantity demanded of a…

Q: If the price of product A falls by 15 percent and the quantity demanded for product B falls by 30…

A: As per answering guidelines, answering the first question.

Q: If the price of petrol increases by 4% and the demand for petrol falls by 1%, what is the price…

A: Price elasticity of demand measures the responsiveness of quantity demanded with respect to change…

Q: The price of a cat toy increases. Due to this price increase, the quantity demanded of dog toys…

A: Demand refers to the quantity of a good or service that consumers are willing and able to purchase…

Q: The quantity demanded of salt decreases when the price of pepper increases. This is an example of…

A: Consider the following definitions Own price elaticity: when the quantity demanded of salt change…

Q: If the cross-price elasticity of demand for hamburgers and hotdogs is positive, then the two goods…

A: Cross Price Elasticity of demand maesures how much the quantity demanded of one good changes due to…

Q: Consider a demand curve that is a straight downward-sloping line and has its midpoint at a price of…

A: Elasticity of demand shows how responsive the quantity demanded is when price of a good changes.

Q: Mikey is very picky and insists that his mom make his breakfast With equal parts of cereal 1 apple…

A: Answer in Step 2

Q: S Suppose that the price of President's Choice macaroni and cheese decreased from $10 to $9 per…

A: Cross price elasticity of demand measures the responsiveness of quantity demanded of good 1 with…

Q: If the cross elasticity of demand is -2: O a. The products are substitutes O b. The products are…

A: Cross price elasticity shows how quantity demanded of one good changes when price of other good…

Q: 5) Price of product X increases by 20%. Qd for product Y decreases by 60%. 6) Price of product X…

A: 5) Cross price elasticity of demand between two goods is the responsiveness of change in demand for…

Q: For a certain good, when the good's price falls from $12 to $10, its quantity demanded rises from 10…

A: Price elasticity of demand = %age change in QD / %age change in Price

Q: 1) If a good has a price elasticity of demand of -3, it implies that: 2) Which of the following…

A: 1)Price elasticity of demand: Price elasticity of demand measures the responsiveness of the change…

Q: O R X₁ S V -IC, IC, B X, X, B, ICA B₂ (a) Are goods X and Y substitutes or complements? Explain. B₂…

A: Individuals decide how to spend resources such as money and time depending on their preferences and…

Q: Assume that the price elasticity of demand is 0.20. Given a 10 percent increase in price, we will…

A: Elasticity helps in determining the changes that takes place in quantity demand when the price is…

Q: The cross-price elasticity of demand for Goods A and B is equal to one. O A. A and B have the same…

A: Cross price elasticity is given as the change in quantity demanded of good A when nothing but the…

Q: Suppose have the following information concerning income and equilibrium quantitle automobile…

A: The income elasticity of demand is the responsiveness of the amount demanded for a decent to an…

Q: Suppose X and Y are substitutes. If the price of Y increases, the demand for X will most likely…

A: Demand for a good is inversely related with its price. Therefore, demand curve is depicts the…

Q: When income rises by 10%, the demand for Good A falls by 3%. From the above, we know Good A is O a…

A: Income is referred as a non price determinant that affect the demand for the good.

Question

Suppose the price of good A increases by 50%, causing quantity demanded for good B to increase by
15% The cross elasticity of demand is
and goods A and B are
O 0.3; complements
O 05: complements
O 0.3: substitutes
O 0.5: substitutes

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?
The equation for a demand curve is P=483Q. What is the elasticity in moving from quantity of 5 to a quantity of 6?
The avenge annual income rises from 25,000 to 33,000, and the quantity of bleed consumed in a year by the avenge person falls from 30 loaves to 22 loaves. What is the income elasticity of bread consumption? Is bread a normal or an inferior good?
(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
Why is the demand curve with constant unitary elasticity concave?
What does a price elasticity of demand of 0.39 mean?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
What is the formula for line cross-price elasticity of demand?
The price of a good rises from 8 to 12, and the quantity demanded falls from 110 to 90 units. Calculated with the midpoint method, the price elasticity of demand is a. 1/5. b. 1/2. c. 2. d. 5.
Over time, technological advance increases consumers incomes and reduces the price of smartphones. Each of these forces increases the amount consumers spend on smartphones if the income elasticity of demand is greater tha____________ and if the price elasticity of demand is greater than_____________. a. zero, zero b. zero, one c. one. zero d. one, one