The cross-price elasticity of demand between strawberries and whipped cream is (C) -0.5.
What is the cross-price elasticity of demand?
- The cross elasticity of demand, also known as the cross-price elasticity of demand, is a measure in economics that compares the percentage change in the quantity desired for one commodity to the percentage change in the price of another good, everything else being equal.
- In practice, the amount desired of a thing is affected not only by its own price (price elasticity of demand) but also by the prices of other "related" products.
- As an example, when strawberry prices rise by 20%, demand for whipped cream falls by 10%.
- The cross-price elasticity of demand between strawberries and whipped cream is -0.5.
Therefore, the cross-price elasticity of demand between strawberries and whipped cream is (C) -0.5.
Know more about cross-price elasticity of demand here:
https://brainly.com/question/25996933
#SPJ4
The complete question is given below:
When strawberry prices increase by 20 percent, the quantity demanded of whipped cream falls by 10 percent. What is the cross-price elasticity of demand between strawberries and whipped cream?
a. -2
b. 2
c. -0.5
d. 0.5
