Calculate the cross-price elasticity of demand

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When the price of ketchup rises by 15 percent, the demand for hot dogs falls by 1 percent.

1. Calculate the cross-price elasticity of demand.

Instructions: Enter your response rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.

Cross-price elasticity of demand:

2. In the original scenario, what would have to happen to the demand for hot dogs for us to conclude that hot dogs and ketchup are substitutes?

a) The demand for hot dogs would have to remain unchanged.

b) The demand for hot dogs would have to rise.

c) The demand for hot dogs would have to decline.

Reference no: EM132478692

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