Solution & Explanation :-
CROSS PRICE ELASTICITY OF DEMAND ={ % change in quantity demanded for plates / % change in price of cups}
%change in quantity demanded for plates =[ (4450-4950)/4950] ×100
= - 0.10×100= - 10%
%change in price of cups = [(4.05-3.75)/3.75]×100
= 0.08×100= 8%
Therefore,
Cross price elasticity of demand = - 10%/8%
= - 1.25 Ans.
Here the cross price elasticity of demand is less than zero there both of the products are complements.
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