If the Cross Elasticity of Demand Between Beef and Bison

question 7

Multiple Choice

If the cross elasticity of demand between beef and bison is 1.5, then a 3 percent increase in the price of beef will lead to

• A)a 4.5 percent increase in the quantity of bison demanded.
• B)a 4.5 percent decrease in the quantity of bison demanded.
• C)a 2 percent increase in the quantity of bison demanded.
• D)a 2 percent decrease in the quantity of bison demanded.
• E)a 0.5 percent increase in the quantity of bison demanded.

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Definitions:

Profit Margin

The amount by which revenue from sales exceeds costs in a business, expressed as a percentage.

Sales-Oriented

A business approach focused primarily on generating sales regardless of customer needs or the longer-term company interests.

Objective

A specific, measurable, attainable, relevant, and time-bound goal that an individual or organization aims to achieve.

Price Increases

Price increases refer to the action of raising the cost at which goods or services are sold, often in response to factors like inflation, increased production costs, or higher demand.