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A rise in the price of sushi of from 98cents to​ $1.02 a piece decreases the quantity of soy sauce demanded form 101 units to 99 units an hour and decreases the quantity of sushi demanded by 1 percent an hour. Calculate the price elasticity of demand for sushi and the cross elasticity of demand for soy sauce with respect to the price of sushi.

Respuesta :

Answer:

0.245

0.485

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price.

percentage change in quantity demanded / percentage change in price

Percentage change in price = (1.02-0.98) / 0.98 = 0.04081633 × 100 = 4.08%

1% / 4.08% = 0.245

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

Price elasticity of demand for sushi =

Cross elasticity of demand for soy sauce with respect to the price of sushi = percentage change in quantity demanded of soy sauce / percentage change in price

Percentage change in quantity demanded of soy sauce = (101 - 99) / 101 = 0.0198 × 100 = 1.98%

= 1.98% / 4.08% = 0.485

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