If a 20% rise in price of Whiskey leads to a 30% increase in quantity demanded of Schnapps, the cross elasticity of demand is

  • A 3.0
  • B 2.5
  • C 2.3
  • D 1.5
waec 2011economics

The correct answer is D. 1.5

It is calculated by taking the percentage change in the quantity demanded of one good and dividing it by the percentage change in the price of the other good.

Hence we; 30/20 = 1.5

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