Question

If the cross-price elasticity between ketchup and hamburgers is -1.5 , a -1.3 percent change in the price of ketchup will lead to a ____percentage change in quantity demanded for hamburgers.

Answer 1

The cross price elasticity between ketchup and hamburgers is -1.5. this means that it is the price of ketchup is change by 1% the quantity Demanded of hamburger changes by -1.5 %.

Change brought in the Quantity Demanded of Hamburgers by 1% change in the price of ketchup= -1.5%

Change brought in the quantity demanded of hamburgers by a -1.3 % change in the price of ketchup= -1.5×-1.3= 1.95 %

A -1.3 Percent change in the price of ketchup will lead to a 1.95 percentage change in the quantity demanded of hamburgers.