Rising peanut prices have forced peanut butter makers to raise the price of a jar of peanut butter from $2 to $3 per jar, causing quantity demanded to fall. In addition, sales of jelly also dropped by 15%.
Using the midpoint method, what is the cross elasticity of demand between peanut butter and jelly? Round your calculation(s) to two decimal places.
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| B. |
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| D. |
Based on your calculation for cross elasticity, peanut butter and jelly are best viewed as:
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| B. |
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Soon after the peanut butter price increase, makers of chocolate spread dropped the price from $4 to $3 per jar. This resulted in a further decline in peanut butter sales by 20%. Using the midpoint method, what is the cross elasticity of demand between peanut butter and chocolate spread? (Round the final answer to two decimal places.)
Using the midpoint method, what is the cross elasticity of demand between peanut butter and chocolate spread? (Round the final answer to two decimal places.)
| A. |
| B. |
| C. |
| D. |
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Based on your calculation for cross elasticity of demand, peanut butter and chocolate spread are best viewed as:
| A. |
| B. |
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