Final answer:
To calculate the cross-price elasticity of demand (XED) for product Y with respect to product X, the percentage changes in quantity demanded of Y and price of X are calculated, and then divided. The calculated XED value of -0.72 indicates that products X and Y are complements.
Step-by-step explanation:
The student is required to calculate the cross-price elasticity of demand (XED) for product Y with respect to the change in price of product X. The cross-price elasticity of demand measures the percentage change in the quantity demanded of one good in response to a percentage change in the price of another good.
To calculate the XED, we can use the following formula:
XED = (Percentage change in quantity demanded of Y) / (Percentage change in price of X)
First, we calculate the percentage change for both the quantity demanded of product Y and the price of product X:
Percentage change in quantity demanded of Y = ((400 - 250) / ((400 + 250)/2)) x 100 = 48%
Percentage change in price of X = ((15 - 30) / ((15 + 30)/2)) x 100 = -66.67%
Finally, we calculate the XED for Y:
XED = 48% / (-66.67%) = -0.72
The negative sign indicates that products X and Y are complementary goods, meaning that as the price of product X decreases, the demand for product Y increases.