When the price of ketchup rises by 18 percent, the demand for hot dogs falls by 2
Question:
When the price of ketchup rises by 18 percent, the demand for hot dogs falls by 2 percent.
a. Calculate the cross-price elasticity of demand.
b. Are the goods complements or substitutes?
c. In the original scenario, what would have to happen to the demand for hot dogs for us to conclude that hot dogs and ketchup are substitutes?
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To calculate the crossprice elasticity of demand between ketchup and hot dogs you can use the formul...View the full answer
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