Multiple Choice
If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then:
A) a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries.
B) a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price.
C) a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price.
D) a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.
Correct Answer:
Verified
Correct Answer:
Verified
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