If the cross-price elasticity of demand between Good A and Good B is 2 and the percentage change in price of Good A is 5%, what is the percentage change in quantity demanded of Good B?
A) 3%
B) 10%
C) -1.25%
D) 1.50%
E) -3%

Question

Quizplus · Accepted Answer

The formula for calculating the percentage change in quantity demanded of Good B is:
(2 x 5%) / 100% = 10%
Therefore, the percentage change in quantity demanded of Good B is 10%.

If the Cross-Price Elasticity of Demand Between Good a and Good