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Homework answers / question archive / When the price of gadgets rises by 10% the demand for widgets falls by 40%

When the price of gadgets rises by 10% the demand for widgets falls by 40%

Marketing

When the price of gadgets rises by 10% the demand for widgets falls by 40%. What is the cross price elasticity of widgets and gadgets?

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The calculated value of the cross price elasticity of demand between widgets and gadgets is -4.

The cross-price elasticity of demand is given by: