Cross-price elasticity of demand is used to determine whether
a. a product is an inferior or normal good
b. a product is a necessity or a luxury
c. two products are substitutes or complements
d. price and total revenue are directly or inversely related
e. the product's demand curve is linear
C
Economics
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The cross-price elasticity of demand for peanut butter with respect to the price of jelly is -0.3. If we expect the price of jelly to decline by 15%, what is the expected change in the quantity demanded for peanut butter?
Correct! +4.5% -4.5% +15% +45%
Economics
Look again at the figure The Market for Sandwiches. How much total surplus would be lost if there were a quota of only eight sandwiches that could be legally exchanged at a price of $5?
A) $3
B) $72
C) $27
D) $32
Economics