ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When the price of ham increases by 10%, the demand for ham decreases by 5%, and the demand for turkey increases by 15%. What is the cross-price elasticity between ham and turkey?
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2.0
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-0.5
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-2.0
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1.5
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Explanation:
Detailed explanation-1: -So, if the price of a good increases by 10 percent and the quantity demanded decreases by only 5 percent, that good is said to have inelastic demand.
Detailed explanation-2: -Formula to measure cross elasticity of demand: E= Percentage change in demand of commodity X/ Percentage change in price of commodity Y. Q.
Detailed explanation-3: -If the elasticity of supply is 0.5, then a 10% decrease in price will result in a 5% increase in quantity supplied.
Detailed explanation-4: -Question 1When the price of commodity C rises by 10%, the quantity demanded falls by 18%. Thisis an example of:perfectly elastic demand.
There is 1 question to complete.