If the Cross Price Elasticity of Demand for Fries with Respect

question 238

Multiple Choice

If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then:

• A)​a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries.
• B)​a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price.
• C)​a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price.
• D)​a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.

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Definitions:

Claim

An assertion of the truth of something, typically one that is disputed or in doubt.

Motor Carrier Cost

The expenses involved in transporting goods via motor vehicles, including fuel, maintenance, and driver wages.

Highly Variable

Refers to situations, processes, or data that exhibit a high degree of variance, indicating significant fluctuations or differences over time.

Modal Selection

The process of choosing the most appropriate method of transportation for goods based on factors such as cost, speed, and product characteristics.