Final answer:
The average cross elasticity of desktop computers' demand with respect to laptops is positive, indicating that these are substitute goods and that an increase in the price of one leads to an increased demand for the other.
Step-by-step explanation:
The average cross elasticity of desktop computers' demand with respect to laptops helps us understand the relationship between the price of laptops and the demand for desktop computers. To calculate it, we use the formula for cross-price elasticity of demand, which is:
Cross-price elasticity of demand = (% change in quantity demanded of desktop computers) / (% change in price of laptops)
Given that when the average price of laptop computers increases from $646 to $832, the quantity demanded of laptop computers decreases from 919.7 to 479 units (which means a decrease), and the quantity demanded of desktop computers increases from 1047 to 1833 units (which means an increase), we have a positive relationship. This indicates that as the price of laptops increases, more desktops are demanded, suggesting that laptops and desktops are substitute goods.
In this case, the cross elasticity of demand is positive because the increase in price of laptops led to an increase in the quantity demanded for desktops.