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Suppose the Price of Jelly Increases by 10 Percent and the Amount

Question 4

Multiple Choice

Suppose the price of jelly increases by 10 percent and the amount of peanut butter purchased decreases by 20 percent. What is the cross-price elasticity of demand between these two goods?


A) 0.5
B) 2
C) −0.5
D) −2

Correct Answer:

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