Find the cross elasticity of demand

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Reference no: EM133401546

Question 1) You own San Antonio's top rated food truck that sells the best carne asada tacos (good A) but the burger food truck (good B) next door just started a promotional sale: The burger truck dropped/decreases their prices 22.5% This has caused the quantity demanded of tacos to decrease by 12.5%

- Find the cross elasticity of demand (for tacos with respect to the price of burgers)

- Determine whether the cross-elasticity demand for a substitute is positive or negative.

Question 2) You recently received a 20% raise at work (change in income). Now that you're making money you shop only at Central Market H-E-B. Your grocery bill (quantity demanded) for groceries has gone up by 12%.

- Find the income elasticity of demand

- Determine whether the income elasticity of demand is positive or negative.

Reference no: EM133401546

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