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Answer to Question #52476 in Microeconomics for tinuade
Question #52476
sign of the implied cross-price elasticity
with drinks from McDonald’s competitors?
with drinks from McDonald’s competitors?
Expert's answer
Cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good.
Cross-price elasticity with drinks from McDonald’s competitors will be more than 1, because cross-price elasticity of substitutes is positive.
Cross-price elasticity with drinks from McDonald’s competitors will be more than 1, because cross-price elasticity of substitutes is positive.
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