Essay
Calculate the cross-price elasticity for the following goods.Are they substitutes or complements?
(A)The price of airline tickets goes up by 20 percent,causing the quantity demanded for gasoline to go up by 5 percent.
(B)The price of pancake flour goes up by 10 percent,causing the quantity demanded for pancake syrup to drop by 20 percent.
(C)The price of coffee goes up by 5 percent,causing the quantity demanded for tea to go up by 5 percent.
(D)The price of computers goes up by 5 percent,causing the quantity demanded for computer disks to drop by 2 percent.
Correct Answer:

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(A) Substitutes
(B)...View Answer
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Correct Answer:
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(B)...
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