The price of a large pizza decreased from $23.00 to $19.00. As a result, the qua

Question

The price of a large pizza decreased from $23.00 to $19.00. As a result, the quantity demanded of skateboards increased from 250.00 to 270.00. 1. Using the midpoint formula, what is the percentage change observed for the price of a large pizza? Give your answer to two decimal places. 2. Using the midpoint formula, what is the percentage change observed for the quantity demanded of skateboards? Give your answer to two decimal places. 3.What is the cross-price elasticity of demand between pizzas and skateboards? Give your answer to two decimal places.

Explanation / Answer

Original price of pizza: 23 New price of Pizza: 19 Decrease in price: -4 Average Price" 21 % decrease in Price: -19.05% Original demand 250 Nnew demand: 270 Increase in Demand: 20 Average demand 260 % Increase in demand 7.69% Cross elasticity of demand: % inccreasse in demand of Skateboards/ % decrease in price f Pizza 7.69% / - 19.05% = -0.404

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