The Demand for Fax Machines Has Been Estimated to Be

Multiple Choice

The demand for fax machines has been estimated to be Q = 1,000 - P + 40L,where P is the price of the machines and L is the average cost of a 10-minute midday call from Los Angeles to New York.At a fax machine price of $400 and a phone call cost of $10,the cross-price elasticity of demand for fax machines with respect to the price of phone service is:

A) 0.4.
B) 2.5.
C) -0.25.
D) 4.0.
E) 4.25.