8 answer this one first please The price elasticity of deman

8, answer this one first please

The price elasticity of demand for magazines is 0.4 The price elasticity of demand for newspapers is 0.3 The cross clasticity of demand for newspapers with respect to the price of a magazine is 0.6

Solution

Cross elasticity for newspapers= %change in quantity demanded of newspapers/%change in price of magazine

0.6=(%change in quantity demanded of newspapers)/5

%change in quantity demanded of newspapers=5(0.6)=3% increase

price elasticity of demand for newspapers=0.3

0.3=%change in quantity demanded of newspapres/% change in price of newspapers

To decrease quantity demanded of newspapers by 3%

0.3=3/%change in price

% change in price=10%

price of newspaper should increase by 10% to maintain quantity demanded of newspaper constant.