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)cannot be calculated because income is not constant.

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)cannot be calculated because income is not constant.

Quizplus · Accepted Answer

The cross elasticity of demand measures how the quantity demanded of one good (Jolt) responds to a change in the price of another good (Coke). A value of 1.5 indicates that Jolt is a substitute for Coke, as 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