Use the table below to answer the following questions.
Table 4.2.2
-Refer to Table 4.2.2.The cross elasticity of demand for Jolt with respect to the price of Coke is
A)0.75.
B)1.5.
C)0.40.
D)10.
E)-1.5.

Question

Use the table below to answer the following questions.
Table 4.2.2 
-Refer to Table 4.2.2.The cross elasticity of demand for Jolt with respect to the price of Coke is
A)0.75. 
B)1.5. 
C)0.40. 
D)10. 
E)-1.5.

Quizplus · Accepted Answer

Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. A positive cross elasticity indicates that the goods are substitutes. The value 1.5 suggests that Jolt and Coke are substitutes, and the demand for Jolt increases by 1.5% for every 1% increase in the price of Coke.

Use the Table Below to Answer the Following Questions