Question

The cross-price elasticity of demand measures the absolute change in the quantity demanded of one good...

The cross-price elasticity of demand measures the

absolute change in the quantity demanded of one good divided by the absolute change in the price of another good.

percentage change in the price of one good divided by the percentage change in the quantity demanded of another good.

percentage change in the quantity demanded of one good in one location divided by the price of the same good in another location.

percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.

Homework Answers

Answer #1

Option D.

  • Cross price elasticity of demand measures the change in the demand of one good with respect to the change in the price of its related good.
  • It is usually calculated as the percentage change in quantity demanded of one good divided by the percentage change in the price of another good.
  • If the price and quantity demanded move in same direction like substitute goods, then cross price elasticity of demand is said to be positive.
  • If the price and quantity demanded move in different directions like complementary goods, then cross price elasticity of demand is said to be negative.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Cross Price Elasticity simply measures the percentage change in quantity demanded of one good divided by...
Cross Price Elasticity simply measures the percentage change in quantity demanded of one good divided by the percentage change in price of another good. For example, the enrollment of college students at California state-funded community colleges would probably fall slightly if the popular California UC and CSU universities (e.g. UC Berkeley) lowered their prices by 50 percent. True or False?
Cross-price elasticity of demand is calculated as the total percentage change in quantity demanded divided by...
Cross-price elasticity of demand is calculated as the total percentage change in quantity demanded divided by the total percentage change in price. percentage change in the price of good 1 divided by the percentage change in the price of good 2. percentage change in quantity demanded divided by the percentage change in income. percentage change in quantity demanded of good 1 divided by the percentage change in the price of good 2.
The price elasticity of demand measures: Select one: a. the percentage change in quantity demanded of...
The price elasticity of demand measures: Select one: a. the percentage change in quantity demanded of a good in response to a one percentage change in income b. none of the above c. the change in the number of units demanded of a good in response to a one percentage change in its price d. the percentage change in quantity demanded of a good in response to a one dollar change in its price
The cross-price elasticity of demand between goods X and Y measures the responsiveness of the quantity...
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
Q8. Cross-price elasticity of demand is calculated as the A) percentage change in quantity demanded divided...
Q8. Cross-price elasticity of demand is calculated as the A) percentage change in quantity demanded divided by percentage change in price of a good. B) percentage change in quantity demanded of one good divided by percentage change in price of a different good. C) percentage change in quantity sold divided by percentage change in buyers' incomes. Q.9. If the cross-price elasticity of demand for computers and software is negative, this means the two goods are A) substitutes. B) complements. C)...
Demand is inelastic if _____ Select one: a. the absolute value of price elasticity is equal...
Demand is inelastic if _____ Select one: a. the absolute value of price elasticity is equal to 1. b. the percentage change in price is greater than the percentage change in quantity demanded. c. the absolute value of price elasticity is greater than 1. d. the percentage change in price is less than the percentage change in quantity demanded. e. the percentage change in price is equal to the percentage change in quantity demanded.
If the cross-price elasticity of demand between Good A and Good B is 3, the price...
If the cross-price elasticity of demand between Good A and Good B is 3, the price of Good B increases, and the price elasticity of demand for Good B is inelastic, we can expect to see a ________ change in the quantity demanded for Good A. a.positive, zero b.positive, small c.positive, large d.negative, one-for-one negative, e.infinite
Assume the price elasticity of demand for a good is –1.23. The demand for this good...
Assume the price elasticity of demand for a good is –1.23. The demand for this good is _______ which means the percentage change in quantity demanded (in absolute value) is _______ the percentage change in price (in absolute value). Group of answer choices elastic, larger than elastic, smaller than inelastic, smaller than inelastic, larger than
A measure of the rate of percentage change of quantity demanded with respect to price, holding...
A measure of the rate of percentage change of quantity demanded with respect to price, holding all other determinants of demand constant is a. Income elasticity of demand b. Own price elasticity of demand c. Price elasticity of market equilibrium d. Cross price elasticity of demand The value of the income elasticity of demand coefficient for Good X is  given as 0.1. This means that a. as income increases by 10 percent, quantity demanded rises by 1 percent. b. as income...
The following table lists the cross elasticity of demand for several goods, where the percentage quantity...
The following table lists the cross elasticity of demand for several goods, where the percentage quantity change is measured for the first good of the pair, and the percentage price change is measured for the second good. Good Cross elasticity of demand Air-conditioning units and kilowatts of electricity -0.34 Coke and Pepsi 0.63 High-fuel-consuming SUVs and gasoline -0.28 McDonald’s burgers and Harvey burgers 0.82 Butter and Margarine 1.54 1.Explain the sign of each of the cross elasticities. What does it...