Answered: 18. The cross-price elasticity for…

18. The cross-price elasticity for textbooks and copies of old exams is -3.5. If the price of copies of old exams increases by 10 percent, what will happen to the quantity demanded of textbooks?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 16PAE

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Question

How to do this question? This is an exercise. Thanks in advance!

18. The cross-price elasticity for textbooks and copies of old exams is -3.5. If the price of
copies of old exams increases by 10 percent, what will happen to the quantity demanded of
textbooks?
Answer: By definition,
E
Q.P
%AQ
%AP
%3D
Substitute Eop =-3.5 and %AP= 10 into the equation to get %AQ = -35.

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