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

Question 112

Multiple Choice

Suppose the price of cereal increases by 10 percent and the amount of milk demanded decreases by 2 percent. What is the cross-price elasticity of demand between these two goods?


A) 5
B) −5
C) 0.2
D) −0.2

Correct Answer:

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