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Cross-price elasticity of demand

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A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is -4.0 and the cross-price elasticity of demand between Y and X is 2.0, then a 2 percent decrease in the price of X will

Multiple Choice

  • leave total revenues from X and Y unchanged.
  • decrease total revenues for X and Y by $600.
  • increase total revenues from X and Y by $520.
  • decrease total revenues from X and Y by $200.

Reference no: EM133082593

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