As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of

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As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of butter demanded by 5%. Calculate the cross-price elasticity of demand between butter and margarine. Are butter and margarine substitutes or complements for this manufacturer?

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Macroeconomics

ISBN: 9781319098759

5th Edition

Authors: Paul Krugman, Robin Wells

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