Answered

IDNLearn.com: Your go-to resource for finding precise and accurate answers. Find in-depth and accurate answers to all your questions from our knowledgeable and dedicated community members.

Number of ice creams sold Price of ice cream tub Price of a portion of chips Ave. Income
‘000
5 £12.00 £4 £19
18 £11.00 £3 £20
23 £10.00 £2 £21
64 £9.00 £1 £24
96 £8.50 £0.90 £29
182 £8.00 £0.80 £34
223 £7.79 £0.70 £39
268 £7.50 £0.60 £44

If the price of chips decreased from £0.90 to £0.70.
calculate the cross elasticity of demand for ice cream

Sagot :

Answer:

To calculate the cross elasticity of demand for ice cream when the price of chips decreased from £0.90 to £0.70, we need to use the formula for cross elasticity of demand.

The formula for cross elasticity of demand is:

Cross Elasticity of Demand = ((% Change in Quantity Demanded of Ice Cream) / (% Change in Price of Chips))

First, calculate the % change in quantity demanded of ice cream:

- Initial quantity of ice creams sold = 96 '000

- Final quantity of ice creams sold = 223 '000

% Change in Quantity Demanded of Ice Cream = ((Final Quantity - Initial Quantity) / Initial Quantity) * 100

Next, calculate the % change in the price of chips:

- Initial price of chips = £0.90

- Final price of chips = £0.70

% Change in Price of Chips = ((Final Price - Initial Price) / Initial Price) * 100

Finally, substitute these values into the formula and calculate the cross elasticity of demand for ice cream.

Sg024200368idn
The initial of the price of the chips is £90 but the total of the chip is £70
We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Your search for solutions ends here at IDNLearn.com. Thank you for visiting, and come back soon for more helpful information.