Multiple Choice
Suppose the cross-price elasticity of demand between Taco Bell tacos and Carnitas Lonja (in San Antonio, Texas) tacos is 0.8. If Carnitas Lonja increases the price of its tacos by 10%:
A) Taco Bell will sell 10% more tacos.
B) Taco Bell will sell 8% more tacos.
C) Taco Bell will sell 8% fewer tacos.
D) We cannot tell what will happen to Taco Bell, but Carnitas Lonja will sell 8% fewer tacos.
Correct Answer:
Verified
Correct Answer:
Verified
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