Question

If a 30 % 30% price increase for Product A causes a 10 % 10% decrease in its quantity demanded, but no change in the quantity demanded for Product B, what is the cross-price elasticity of these goods? Round your answer to one decimal pl

Answer 1

0.0

Step-by-step explanation:

The calculation of cross-price elasticity is given below:-

cross-price elasticity

= change in quantity demand in product B ÷ Change price in product A

= 0% ÷ 30%

= 0.0

Therefore, the quantity demanded does not change in product B because a change in price of product A, so there is no relationship between A and B. Cross price elasticity of demand deals with the change in quantity demand in product B with respect to change in price A.