Question

Suppose the cross-price elasticity of demand between goods X and Y is 5. How much would the price of good Y have to change in order to change the consumption of good X by 20 percent? percent

Answer #1

Cross price elasticity of demand suggests us the percentage change in quantity demanded for each 1 percent change in price of other related goods. Given that cross price elasticity of demand for spiral notebooks is between goods X and Y is 5. This implies ec = 5

Now ec = % change in consumption (quantity demanded) of X / % change in price of Y

We are given that the % change the consumption of good X = 20 percent. Hence we see that

5 = 20%/% change in price of Y

% change in price of Y = 20%/5 = 4%

Hence the price of good Y have to change by 4%.

Suppose the
cross-price elasticity of demand between goods X and
Y is -5. How much would the price of good Y have
to change in order to change the consumption of good X by
50 percent?
Instruction: If you are entering a negative
number, be sure to use a negative sign (-).
_________percent

Suppose the own price elasticity of demand for good X is -5, its
income elasticity is 1, its advertising elasticity is 3, and the
cross-price elasticity of demand between it and good Y is 4.
Determine how much the consumption of this good will change if:
a) The price of good X decreases by 5 percent.
_____%
b) The price of good Y increases by 8 percent.
_____%
c) Advertising decreases by 2 percent. _____%
d) Income increases by 4...

Suppose the own price elasticity of demand for good X is -5, its
income elasticity is -1, its advertising elasticity is 4, and the
cross-price elasticity of demand between it and good Y is 3.
Determine how much the consumption of this good will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 6 percent.
percent
b. The price of good Y increases by...

Suppose the own price elasticity of demand for good X is -3, its
income elasticity is -2, its advertising elasticity is 4, and the
cross-price elasticity of demand between it and good Y is -2.
Determine how much the consumption of this good will change if:
Instructions:
Enter your responses as percentages. Include a minus (-)
sign for all negative answers.
a. The price of good X decreases by 7 percent.
b. The price of good Y increases by 10...

Suppose the own price elasticity of demand for good X is -2, its
income elasticity is -1, its advertising elasticity is 2, and the
cross-price elasticity of demand between it and good Y is -3.
Determine how much the consumption of this good will change if:
Instructions: Enter your responses as percentages. Include a minus
(-) sign for all negative answers.
a. The price of good X decreases by 4 percent. percent
b. The price of good Y increases by...

The cross-price elasticity of demand between goods X and Y
measures the responsiveness of the quantity of X demanded to
changes in the price of Y.
is the percentage change in the price of Y divided by the
percentage change in the quantity of X demanded.
is greater than zero if X and Y are substitutes.
both a and c
all of the above

If goods X and Y are substitute goods, then the cross-price
elasticity of the price of good Y on the demand
for good X is:
Select one:
a. positive
b. zero
c. undefined
d. negative

Suppose the cross-price elasticity of demand between Coke and
Pepsi is 0.5. If the price of Pepsi is projected to go up 10%, how
much will the demand for Coke change?

Price Elasticity of Demand for good X: −0.34
Income Elasticity of Demand for good X: 0.56
Cross Price Elasticity of Demand for goods X and Y: 0.04
Given the information above, determine the following:
1. whether good X is elastic, unit elastic, or inelastic
2. whether good X follows the “law” of demand
3. whether good X is normal or inferior
4. whether good X is a luxury or a necessity
5. whether good X and good Y are complements,...

Suppose the relationship between Demand for good x (Qx) can be
described by the following linear relationship (Py: price of good
y, I = income):
Qx= 120 – 6Px + 5Py + 3 I
From the demand relationship above, you can conclude: Goods X
and Y are substitute/complementary goods
because_______________________, and a decrease in Py would cause
quantity demanded/demand of Good X to increase/decrease.
Suppose Py = $5 per unit, and I = $10, and Px = $20. At these...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 10 minutes ago

asked 18 minutes ago

asked 18 minutes ago

asked 20 minutes ago

asked 20 minutes ago

asked 31 minutes ago

asked 38 minutes ago

asked 41 minutes ago

asked 44 minutes ago

asked 52 minutes ago

asked 59 minutes ago