Suppose the cross-price elasticity of demand between peanut butter and jelly is -2.50. this implies that a 20 percent increase in the price of peanut butter will cause the quantity of jelly purchased to

Decrease by 50 percent.

Explanation:

Given that,

Cross-price elasticity of demand between peanut butter and jelly = -2.50

This means that peanut butter and jelly are complimentary goods.

Increase in the price of peanut butter = 20 percent

Therefore,

Cross-price elasticity of demand = Percentage change in the quantity demanded of Jelly ÷ Percentage change in the price of peanut butter

-2.50 = Percentage change in the quantity demanded of Jelly ÷ 20

-2.50 × 20 = Percentage change in the quantity demanded of Jelly

- 50% = Percentage change in the quantity demanded of Jelly

This indicates that a 20% increase in the price of peanut butter will lead to reduce the quantity demanded of Jelly by 50%.

this conflict is person vs. society

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answer; microeconomics;