What is alisons cross-price elasticity of demand for tea


Question - Alison consumes only tea and cookies and always consumes 4 cookies with each cup of tea.

a) What is Alison's cross-price elasticity of demand for tea with respect to a change in the price of cookies? Simplify your answer until it is a function of just the prices of tea and cookies.

b) What is Alison's income elasticity of demand for tea? Simplify your answer until you get a numerical value.

Solution Preview :

Prepared by a verified Expert
Microeconomics: What is alisons cross-price elasticity of demand for tea
Reference No:- TGS02371460

Now Priced at $20 (50% Discount)

Recommended (98%)

Rated (4.3/5)