Answer to Question #319159 in Microeconomics for noor

Question #319159

* If the price of coffee (Good 2) rises from Rs. 45 per to Rs. 55 per pack and as a result the consumer’s demand for tea (Good 1) increases from 600 to 800 packs then calculate cross elasticity of demand of tea for coffee


1
Expert's answer
2022-03-27T18:50:07-0400

Cross Elasticity of Demand =increase.in.quantity.of.teaincrease.in.the.price.of.coffee\frac{ increase.in. quantity. of. tea}{ increase .in. the. price. of .coffee}

=(800600)800+600/(5545)(55+45)=1.4285= \frac{(800-600)}{800+600} / \frac{(55-45)}{(55+45)} = 1.4285


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Comments

Fadel
27.08.23, 21:37

I love your help in economics

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