The demand for sushi increases by 20 percent when the price of burritos increases by 40...

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The demand for sushi increases by 20 percent when the price of burritos increases by 40...

The demand for sushi increases by 20 percent when the price of burritos increases by 40 percent. What is the cross price elasticity of demand for sushi?

business economics

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Answer 1

Answer #1

Cross price elasticity of demand for sushi = % Change in demand for sushi / % Change in price of burritos

e = 20 / 40 = 0.5

As given that demand for sushi increases with increase in burritos prices meaning that both goods are substitutes.

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Answer 2

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The demand for sushi increases by 20 percent when the price of burritos increases by 40...

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