The price of elasticity of demand for scented candles is 1.5 The price elasticit

Question

The price of elasticity of demand for scented candles is 1.5 The price elasticity of demand for tapered candles is 2.0 The cross elasticity of demand for tapered candles with respect to the price of a scented candle is 1.5 If the price of a scented candle rises by 4%,the percentage change in the price of a tapered candle that will lead to no change in the quantity demanded of tapered candles is ? percent The price of elasticity of demand for scented candles is 1.5 The price elasticity of demand for tapered candles is 2.0 The cross elasticity of demand for tapered candles with respect to the price of a scented candle is 1.5 If the price of a scented candle rises by 4%,the percentage change in the price of a tapered candle that will lead to no change in the quantity demanded of tapered candles is ? percent The price elasticity of demand for tapered candles is 2.0 The cross elasticity of demand for tapered candles with respect to the price of a scented candle is 1.5 If the price of a scented candle rises by 4%,the percentage change in the price of a tapered candle that will lead to no change in the quantity demanded of tapered candles is ? percent

Explanation / Answer

Ans:

Therefore, by increasing the price of scented candle rises in 4% will lead to an increase of demand of tapered candle in 6%

Then, apply the elasticity of demand formula:

Cross-elasticity = % variation of demand scented candles/ % variation of price tapered candles 1.5 = % variation of demand tapered candles 6%

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