Calculate the Cross-Price Elasticity for the Following Goods

question 128

Essay

Calculate the cross-price elasticity for the following goods.Are they substitutes or complements?
(A)The price of airline tickets goes up by 20 percent,causing the quantity demanded for gasoline to go up by 5 percent.
(B)The price of pancake flour goes up by 10 percent,causing the quantity demanded for pancake syrup to drop by 20 percent.
(C)The price of coffee goes up by 5 percent,causing the quantity demanded for tea to go up by 5 percent.
(D)The price of computers goes up by 5 percent,causing the quantity demanded for computer disks to drop by 2 percent.

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Definitions:

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