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Suppose the Cross-Price Elasticity of Demand Between Hot Dogs and Mustard

Question 238

Multiple Choice

Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00.This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to


A) fall by 200 percent.
B) fall by 40 percent.
C) rise by 200 percent.
D) rise by 40 percent.

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