If the Cross Price Elasticity of Demand for Tacos with Respect

question 59

Multiple Choice

If the cross price elasticity of demand for tacos with respect to burritos equals +2.5, then:

• A)​a 1% increase in the quantity of burritos purchased will lead to a 2.5% increase in the price of a taco.
• B)​a 10% increase in the price of a burrito will lead to a 25% increase in the quantity of tacos demanded at a given price.
• C)​a 1% decrease in the price of a burrito will lead to a 2.5% increase in the quantity of tacos demanded at a given price.
• D)​a 1% increase in the quantity of tacos purchased will lead to a 2.5% increase in the price of a burrito.

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Definitions:

Pulsing

A marketing strategy that combines continuous advertising with periodic heavy promotions to boost sales.

Advertising Schedule

The specification of the timing and duration of advertising.

Base Level

The standard or minimum level of performance, quality, or activity expected in a particular situation or for a specific metric.

Posttesting

The evaluation of an IMC campaign’s impact after it has been implemented.