When price of tea in local cafe rises from birr 10 to 15 per cup, demand for coffee rises from 3000 cups to 5000 cups a day despite no change in coffee prices. a). Detemine cross price elasticity b). Based on the result, what kind of relation exists between the two goods?
When price of tea in local cafe rises from birr 10 to 15 per cup, demand for coffee rises from 3000 cups to 5000 cups a day despite no change in coffee prices. a). Detemine cross price elasticity b). Based on the result, what kind of relation exists between the two goods?
Chapter6: 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...
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When price of tea in local cafe rises from birr 10 to 15 per cup, demand for coffee rises from 3000 cups to 5000 cups a day despite no change in coffee prices.
a). Detemine cross price elasticity
b). Based on the result, what kind of relation exists between the two goods?
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