Question
Coles sells 10,000 kilos of bananas at a regular price of $2. Its elasticity at its regular price is -0.2. Cole's main competitor Woolworths (WOW)
Coles sells 10,000 kilos of bananas at a regular price of $2. Its elasticity at its regular price is -0.2. Cole's main competitor Woolworths (WOW) also sells bananas at $2. If the price of bananas at WOW increased to $4 and Coles doesn't change the price, then the quantity sold at Coles will increase to 11,000 kilos. WOW's reaction elasticity is 0.9. Calculate the cross elasticity of WOW's price on Cole's sales.Select one:
a.0.9
b.None of the above
c .0.2
d.0.1
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Consumer Behavior Buying, Having and Being
Authors: Michael R. Solomon
11th edition
978-0133451153, 133450899, 133451151, 978-0133450897
