Suppose the Cross-Price Elasticity of Demand Between Raspberry Jam and Strawberry

question 1

Multiple Choice

Suppose the cross-price elasticity of demand between raspberry jam and strawberry jam is 7.5.The interpretation of this result is that

• A)a 10% increase in the price of strawberry jam leads to a 7.5% increase in quantity demanded of raspberry jam.
• B)a 10% increase in the price of strawberry jam leads to a 0.75% increase in quantity demanded of raspberry jam.
• C)a 10% increase in the price of strawberry jam leads to a 75% increase in quantity demanded of raspberry jam.
• D)a 10% increase in the price of strawberry jam leads to a 7.5% decrease in quantity demanded of raspberry jam.
• E)a 10% increase in the price of strawberry jam leads to a 75% decrease in quantity demanded of raspberry jam.

---

Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional stock.

Dual-Class Shares

A corporate structure with two or more classes of stock, each with differing voting rights, dividends, or other attributes.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company’s profits through dividends.

Founders

Individuals who establish a company or an organization, often involved in its early development and management.