Options:
A. 3 percent
B. 1.50 percent
C. 10 percent
D. -3 percent
E. -1.25 percent
Answer:C. 10%.
Explanation:Cross elasticity of demand is a term used in economics to describe the rate of response to the Quantity demanded for a good or service due to a change in price of another goods or service.
The cross elasticity of demand can also be called THE CROSS-PRICE ELASTICITY OF DEMAND.
It can be calculated as follows.
Cross elasticity of demand= percentage change in the Quantity demanded for one good÷percentage change in the price of another goods
2=X/5%
The percentage change in Quantity demanded for goods B will be equal to 10%.
