1a Define the term "Cross Elasticity of Demand"
b) What does this measure tell you about the two good involved?
c) Suppose that the price of oranges increases from 60 cents per pound to $1.25 per pound as a result of a frost in Florida. As a result, the market demand increases from 5000 pounds to 8000 pounds. Calculate the cross elasticity with respect to apples.
d) Are the two goods above substitutes or complements? Use your answer in part c to explain.