Final answer:
The cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. In this scenario, the cross-price elasticity of demand for apples is calculated to be 0.4, indicating a 1.2% decrease in demand for apples with a 3% increase in the price of oranges.
Step-by-step explanation:
The cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. It is calculated as the percentage change in the quantity demanded of one good divided by the percentage change in the price of the other good.
In the given scenario, the cross-price elasticity of demand for apples is 0.4 and the percentage change in the price of oranges is -3%. Therefore, the percentage change in the quantity demanded of apples can be calculated as -1.2% or a 1.2% decrease in demand for apples.