Answer:
-0.67
Step-by-step explanation:
Given that,
Initial quantity demanded for video game controllers = 1,800 units
New quantity demanded for video game controllers = 1,900 units
Initial price of video game consoles = $300
New price of video game consoles = $275
Percentage change in quantity demanded for video game controllers:
= (Change in quantity demanded ÷ Initial quantity demanded) × 100
= (100 ÷ 1,800) × 100
= 5.56%
Percentage change in price of video game consoles:
= (Change in price ÷ Initial price) × 100
= (-25 ÷ 300) × 100
= -8.33%
Therefore, the estimated cross-price elasticity of demand for video game controllers is as follows:
= Percentage change in quantity demanded for video game controllers ÷ Percentage change in price of video game consoles
= 5.56 ÷ (-8.33%)
= -0.67