When the price of a smartphone increases 4 percent, the quantity of phone calls demanded decreases by 2 percentCalculate the cross elasticity of demand for phone calls with respect to the price of a smartphone.The cross elasticity of demand for phone calls with respect to the price of a smartphone is>>> Answer to 1 decimal place.>>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign.

cross elasticity of demand refers that change in quantity due to change in price of other goods so…

Answered: When the price of a smartphone…

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...

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Similar questions

Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the vertical axis and quantity on the horizontal axis. Indicate the price elasticity value at each quantity demanded. Explain why the elasticity value gets smaller as you move down the demand curve.
What does a price elasticity of demand of 0.39 mean?
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
(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 __________.
Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.
What is the formula for line cross-price elasticity of demand?
A recent report by the Centers for Disease Control looked at the relationship between the price of beer and the incidence of new cases of STD's. The report concluded that a beer tax increase of $.20 could reduce overall STD rates by 8.9%. Assume that a six pack cost $5.90 before the price increase. Calculate the cross price elasticity between beer and STD's. What is the sign of this cross-price elasticity? According to your estimate, are beer and STD's compliments or substitutes? Does your answer make sense? Explain.
The cross-price elasticity of hamsters and hamster food is -0.3, where the percentage change in quantity is for hamsters and the percentage change in price is measured for hamster food. Calculate the percentage that the quantity demanded of hamsters will change if the price of hamster food decreases by 11%. Enter the response to one decimal place and enter a negative number if the quantity demanded decreases. %AQ for hamsters: %
Suppose that a 20% increase in the price of gasoline causes a 5% decrease in the consumption of gasoline and a 30% drop in the sales of SUVs. What can you say about elasticities?
If the cross-price elasticity between ketchup and hamburgers is –1.2, a 4% increase in the price of ketchup will lead to a 4.8%* drop in quantity demanded of ketchup. drop in quantity demanded of hamburgers. increase in quantity demanded of ketchup. Increase in quantity demanded of hamburgers. If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross-price elasticity of apple sauce and pork chops at a pork chop price of $6?* -1.17 2.71 0.42 -0.86 An income elasticity less than zero tells us that the good is:* a normal good. a Giffen good. an inferior good. an inelastic good.
The price of oranges increases by 5%, and the quantity demanded decreases by 5%. Using our elasticity formula, calculate price elasticity and interpret if it is price elastic, inelastic, or unit elastic.
Suppose you could buy shoes one at a time, rather than in pairs. What do you predict the cross-price elasticity for left shoes and right shoes would be? How does the cross-price elasticity concept inform a decision making process for the consumer?

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