Ask Question
8 November, 14:04

If a 25 percent decrease in the price of sapphires causes a 15 percent decrease in the quantity of diamonds demanded, then the cross-price elasticity of demand between sapphires and diamonds is:

+4
Answers (1)
  1. 8 November, 14:05
    0
    To solve for the cross-price elasticity of demand:

    Take the quantity of the diamonds demanded and divide it by the decrease in the price of sapphires.

    Cross-price elasticity of demand = 15/25

    Cross-price elasticity of demand = 0.6

    When you are solving for the cross-price elasticity of demand, you are seeing the response to the demand of a item when price changes for another good.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If a 25 percent decrease in the price of sapphires causes a 15 percent decrease in the quantity of diamonds demanded, then the cross-price ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers