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Compute the price elasticity of demand

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Between 2009 and 2010, the quantity of cars produced and sold decreased by 20%. During the same period, the price of cars increased by 5% and the cost of gasoline increased by 20%. We know that the cross elasticity of demand of gasoline is -0.3.

Compute the price elasticity of demand for cars during this period.

  • SubjectEconomics
  • TopicGeneral Economics
  • Difficulty LevelCollege/University
  • Answer has attachmentsNo
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Lucas Soto
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