Multiple Choice
The cross-price elasticity of the demand for gasoline-powered cars with respect to the prices of gasoline is -0.71. Suppose that the price of gasoline increases from 2 to 2.10 euros per liter. How would that affect the demand for gasoline-powered cars?
A) Reduce by 0.71%.
B) Increase by 3.55%.
C) Increase by 5%.
D) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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