A shopkeeper sells two commodities A and B, which are close substitute of each other. It is observed that when the price of commodity A rises by 20%…
CA Foundation · Business Economics · PYQS · January 2025
A shopkeeper sells two commodities A and B, which are close substitute of each other. It is observed that when the price of commodity A rises by 20% the demand for B increases by 30% What is the cross price elasticity for commodity B against the price of commodity A?
Suggested Answer and Working Notes:
Correct Answer: Option (C)
C. +1.5
Topics: Theory of Demand and Supply
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