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According to the U.S. Department of Energy, the average price of gasoline in the U.S. fell by 14% in 2015. The number of hybrid electric vehicles (HEV) sold in the U.S. fell by 36% in the same year. Calculate the cross-price elasticity of demand for HEVs and gasoline. Round answer to one place after the decimal.

Sagot :

Parrain

Based on the change in price and quantity demanded, the cross-price elasticity would be 2.57.

What is the Cross-price elasticity?

It shows how much the demand for a good is affected by a price change in a related good.

It is calculated as:

= Change in quantity demanded of one good / Change in price of the other good

= 36% / 14%

= 2.57

In conclusion, the cross-price elasticity is 2.57.

Find out more on cross price elasticity at https://brainly.com/question/25996933.

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