Suppose the Cross-Price Elasticity of Demand Between Grapefruit Juice and Orange

question 100

Multiple Choice

Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6.This means that________.

• A)a 1 per cent decrease in the price of grapefruit juice leads to a 6 per cent increase in orange juice consumption.
• B)a 6 per cent increase in the price of grapefruit juice leads to a 1 per cent increase in orange juice consumption.
• C)if the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
• D)the demand for orange juice is 6 times more than the demand for grapefruit juice.