Demand for strawberries price elastic or inelastic

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Suppose a 3% fall in the price of strawberries increases the quantity of strawberries demanded by 4% and increases the quantity of chocolate demanded by 2%.

a. Using this information, calculate the price elasticity of demand for strawberries at the original price. Interpret your calculation in words.

b. At the original price, is the demand for strawberries price elastic or inelastic?

c. What would have happened to consumers’ total expenditures on strawberries when the price of strawberries decreased?

d. Calculate the cross-price elasticity of demand for chocolate with respect to the price of strawberries at the original price.

e. Are strawberries and chocolate complements or substitutes? Briefly explain your reasoning.

Reference no: EM131173286

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