Ask Question
26 May, 12:14

The quantity demanded of video game controllers increased from 1,800 to 1,900 when the price of video game consoles decreased from $300 to $275. What is the estimated cross-price elasticity of demand for video game controllers? Round your answer to the nearest hundredth. If elasticity is negative, make sure to include the "-" sign in your answer.

+1
Answers (1)
  1. 26 May, 13:58
    0
    -0.67

    Explanation:

    Given that,

    Initial quantity demanded for video game controllers = 1,800 units

    New quantity demanded for video game controllers = 1,900 units

    Initial price of video game consoles = $300

    New price of video game consoles = $275

    Percentage change in quantity demanded for video game controllers:

    = (Change in quantity demanded : Initial quantity demanded) * 100

    = (100 : 1,800) * 100

    = 5.56%

    Percentage change in price of video game consoles:

    = (Change in price : Initial price) * 100

    = (-25 : 300) * 100

    = - 8.33%

    Therefore, the estimated cross-price elasticity of demand for video game controllers is as follows:

    = Percentage change in quantity demanded for video game controllers : Percentage change in price of video game consoles

    = 5.56 : (-8.33%)

    = - 0.67
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The quantity demanded of video game controllers increased from 1,800 to 1,900 when the price of video game consoles decreased from $300 to ...” 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