When the Price of Bread Increases by 5 Per Cent,the

question 106

Multiple Choice

When the price of bread increases by 5 per cent,the quantity demanded of crackers increases by 2 per cent.The cross elasticity of demand between crackers and bread is:

• A)0.67.
• B)1.5.
• C)2.5.
• D)3.2.
• E)0.4.

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Definitions:

Commercial Use

The utilization of something for business purposes or in a commercial setting, often involving profit generation.

Demand Determined

A situation where the quantity of a good or service bought is strictly influenced by consumer demand.

MRP

Marginal Revenue Product, which is the additional revenue generated from employing one more unit of a resource.

Productivity

A measure of the efficiency of production, often expressed as the ratio of output to input within a specific period.