A 3 percent increase in the price of tea causes a 6 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is: A. -2.0 B. +0.5 C. -0.5 D. +2.0
A 3 percent increase in the price of tea causes a 6 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is: A. -2.0 B. +0.5 C. -0.5 D. +2.0
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 7SQP: Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less...
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A 3 percent increase in the price of tea causes a 6 percent increase in the demand for coffee. The cross elasticity of demand for coffee with respect to the price of tea is:
A.
-2.0
B.
+0.5
C.
-0.5
D.
+2.0.
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