Question #189071

If the percentage change in the quantity demanded of a commodity A is 50% and the percentage change in the price of commodity B is 33.33% determine the coefficient of elasticity and what type of commodities are comodity A and B

Expert's answer

If the percentage change in the quantity demanded of a commodity A is 50% and the percentage change in the price of commodity B is 33.33%, then the coefficient of elasticity is:

Ed = 0.5/0.3333 = 1.5, so commodities A and B are substitutes.

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