Calculate the cross-price elasticity of demand

Reference no: EM13966437

1. Calculate the cross-price elasticity of demand. Please use the midpoint method when applicable.

a. When the price of Product E decreases 9%, this causes its quantity demanded to increase by 14% and the quantity demanded for Product F will increase 12%. Calculate the cross-price elasticity of demand. Please use the midpoint method when applicable.

b. A 20% price increase for product A causes a decrease in its quantity demanded, but no change in the quantity demanded for the Product B

c. If a 20% price increase for product A causes a 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?

2. Last week, Michelle spent $30 on caviar. Today, Michelle still spends on $30 on caviar even though its price doubled. What is Michelle's price elasticity of demand for caviar? (Use the midpoint formula)

Reference no: EM13966437

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