When the Price of Pens Went from $1 to $1

question 45

Multiple Choice

When the price of pens went from $1 to $1.50, the quantity demanded of pencils changed from 50 to 75 a day. The cross-price elasticity of demand for pens (using the initial value formula) is

• A) 0.8.
• B) 0.4.
• C) 0.2.
• D) It cannot be determined from the information provided.

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