Answered: A 12 percent increase in the price of…

A 12 percent increase in the price of tea causes 3 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is A -4. B 4. C -0.25 D 0.25

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 16SQ

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Question

A 12 percent increase in the price of tea causes 3 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is

A -4.

B 4.

C -0.25

D 0.25

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