-Refer to the above table. Suppose the price of X increases from $10 to $12. What is the cross price elasticity of demand between X and Y?
A) -1.833
B) +0.545
C) +0.579
D) +1.833

Question

-Refer to the above table. Suppose the price of X increases from $10 to $12. What is the cross price elasticity of demand between X and Y?
A) -1.833 
B) +0.545 
C) +0.579 
D) +1.833

Quizplus · Accepted Answer

The cross price elasticity of demand is calculated as the percentage change in quantity demanded of Y divided by the percentage change in price of X. If the quantity demanded of Y increases by 10% when the price of X increases by 20%, the cross price elasticity is +0.579.

-Refer to the Above Table