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If a 30 % 30% price increase for Product A causes a 10 % 10% decrease in its quantity demanded, but no change in the quantity demanded for Product B, what is the cross-price elasticity of these goods?
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If a 30 % 30% price increase for Product A causes a 10 % 10% decrease in its quantity demanded, but no change in the quantity demanded for Product B, what is the cross-price elasticity of these goods? Round your answer to one decimal pl

User Mittal
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1 Answer

3 votes

Answer:

0.0

Step-by-step explanation:

The calculation of cross-price elasticity is given below:-

cross-price elasticity

= change in quantity demand in product B ÷ Change price in product A

= 0% ÷ 30%

= 0.0

Therefore, the quantity demanded does not change in product B because a change in price of product A, so there is no relationship between A and B. Cross price elasticity of demand deals with the change in quantity demand in product B with respect to change in price A.

User Gohel Kiran
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