Post a New Question

Economics

posted by .

Sandra purchases 5 pounds of coffee and 10 gallons of milk per month when the price of coffee is $10 per pound. She purchases 6 pounds of coffee and 12 gallons of milk per month when the price of coffee is $8 per pound. Sandra’s cross-price elasticity of demand for coffee and milk is

A. 0.82, and they are substitutes.

B. -0.82, and they are complements.

C. 1.22, and they are substitutes.

D. -1.22, and they are complements.

  • Economics -

    B
    Cross-price elasticity of demand =

    Percentage change in quantity demanded of good 1 / Percentage change in the price of good 2

    I did the work and that's what I got.

  • Economics -

    -0.82, and they are complements.

Answer This Question

First Name:
School Subject:
Answer:

Related Questions

More Related Questions

Post a New Question