Question:
The demand for Penn's Oil motor oil can be characterized by the following point elasticities: price elasticity= -2.5,cross-price elasticity w/Value Lean motor oil=1.5,income elasticity= 0.75.Indicate if statement is true or false and explain your answer. THE CROSS-PRICE ELASTICITY INDICATES THAT A 2% INCREASE IN THE PRICE OF VALUE LEAN WILL CAUSE A 3% INCREASE IN PENN'S OIL DEMAND.