Question

If a 24% drop in the price of one good causes a 3% increase in the quantity demanded of another good, calculate the cross-price elasticity of demand for the good?

Answer 1

The cross-price elasticity of demand measures how the quantity demanded of one good changes in response to a change in the price of another good.

Step-by-step explanation:

The cross-price elasticity of demand measures how the quantity demanded of one good changes in response to a change in the price of another good. It is calculated by dividing the percentage change in the quantity demanded of the first good by the percentage change in the price of the second good.