Ask Question
16 June, 01:10

f 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

+2
Answers (1)
  1. 16 June, 01:42
    0
    -1.6

    Explanation:

    The cross-price elasticity measures how sensible is the demand of a product when the price of another one changes. When the cross-price elasticity is negative, it means that when the price of a good decreases, the demand for the second one increases. When the cross-price elasticity is positive, it means that when the price of a good decreases, the demand for the second one also decreases.

    Cross-price elasticity of the demand = Percent change in quantity of good A/Percent change in price of good B

    Cross-price elasticity of the demand = (40/100) / (-2/8)

    Cross-price elasticity of the demand=0.4/-0.25

    Cross-price elasticity of the demand=-1.6

    The cross-price elasticity of apple sauce and pork chops at a pork chop price of $6 is - 1.6.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “f 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 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers