Part Three: Neighboring WSU dropped their tuition and fees by 14 percent and TTA saw enrollment fall from 8,400 to 7,400. What is the cross elasticity between the two schools.?

0.85

Explanation:

Given that

Dropped percentage of tuition and fees = 14%

Enrollment fall from 8,400 to 7,400

So, the cross elasticity between the two schools is

= Percentage change in quantity demanded of one good : Percentage change in price of another good

where,

Percentage change in quantity demanded of one good equals to

= ($7,400 - $8,400) : ($8,400)

= - 11.9%

And, the percentage change in price of another good is - 14%

So, the cross elasticity is

= - 11.9% : - 14%

= 0.85