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If a 12 percent increase in the price of Cheerios causes a 16 percent reduction in the number of boxes of cereal​ demanded, the price elasticity of demand for Cheerios is _______.

Respuesta :

eooyibo123

Answer:

Price elasticity= -1.3

Price is elastic

Explanation:

Cross-price elasticity of demand is measure of the responsiveness of a product to changes in the quantity and price of another product.

So the price elasticity for Cheerios is

Price elasticity= Percentage change in boxes of cereal / Percentage change in Cheerios

Price elasticity= -16/12

Price elasticity= -1.3

Price is elastic

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