Suppose the Cross-Price Elasticity of Demand Between Grapefruit Juice and Orange

Multiple Choice

Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately 6.This means that________.

A) a 1 per cent decrease in the price of grapefruit juice leads to a 6 per cent increase in orange juice consumption.
B) a 6 per cent increase in the price of grapefruit juice leads to a 1 per cent increase in orange juice consumption.
C) if the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
D) the demand for orange juice is 6 times more than the demand for grapefruit juice.