A Local Bakery Gives Information on Consumer Purchasing Habits for Muffins

question 142

Multiple Choice

A local bakery gives information on consumer purchasing habits for muffins and cupcakes.It says that when the price of a muffin is $1,people buy 55 cupcakes.When the price of a muffin is raised to $2,cupcake purchases go up to 65 cupcakes.The cross-price elasticity of demand is

• A) 0.50.
• B) 0.25.
• C) 0.67.
• D) 2.00.
• E) 4.00.

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Definitions:

Comparison Lines

In the context of perception, these are reference lines against which other objects or magnitudes are compared or judged.

Conformity

The tendency of individuals to align their attitudes, beliefs, and behaviors with those of a group or society.

Informational Social Influence

The influence of others that leads to conformity because of a desire to be correct and understand the correct behavior or opinion.

Normative Social Influence

Involves the impact of social norms and the desire to be accepted by others on an individual's behavior.