When the price of photocopiers increases by 13%, the associated change in printers demanded is 6%. You don't know if this is an increase or decrease in the quantity demanded of printers, but you know that photocopiers and printers are substitutes. Use that information to calculate the cross-price elasticity of demand for printers. Remember, for some elasticities, we take the absolute value. For others, we do not. Include a negative sign if needed.
When the price of photocopiers increases by 13%, the associated change in printers demanded is 6%. You don't know if this is an increase or decrease in the quantity demanded of printers, but you know that photocopiers and printers are substitutes. Use that information to calculate the cross-price elasticity of demand for printers. Remember, for some elasticities, we take the absolute value. For others, we do not. Include a negative sign if needed.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:When the price of photocopiers increases by 13%, the associated change in printers
demanded is 6%. You don't know if this is an increase or decrease in the quantity demanded of
printers, but you know that photocopiers and printers are substitutes. Use that information to
calculate the cross-price elasticity of demand for printers.
Remember, for some elasticities, we take the absolute value. For others, we do not. Include a
negative sign if needed.
You Answered
Correct Answer
0.46 margin of error +/- 0.1
As the price of photocopiers increases, people buy more of the now relatively cheaper
printer as they are substitutes for the consumer. The price of photocopiers and quantity
%AQ
of printers move in the same direction so the cross-price elasticity is positive.e
%ΔΡ
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