If the quantity of pineapples demanded increases by 4% when the price of papayas increases by 16%, the cross-price elasticity of demand between pineapples and papayas is
A) -4.
B) 0.25.
C) 4.
D) 64.

Question

Quizplus · Accepted Answer

Cross-price elasticity of demand is calculated as the percentage change in quantity demanded of one good divided by the percentage change in price of another good. Here, it is 4% / 16% = 0.25.

If the Quantity of Pineapples Demanded Increases by 4% When