When the Price of Bananas Rises 2 Percent, the Quantity

question 121

Essay

When the price of bananas rises 2 percent, the quantity demanded of peanut butter falls 4 percent.
a) What is the cross elasticity of demand between these two goods?
b) How are these goods related?
c) If the price of bananas rises, how will that affect the demand curve for peanut butter?

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