In video Ville the price elasticity of demand for camcorders

In video Ville, the price elasticity of demand for camcorders 1.6, the income elasticity of demand for camcorders is 0.1, and the crow elasticity of demand for camcorders with respect to digital cameras is 0.2. Camcorders and digital cameras are

Solution

Cross elasticity between camcorders & digital camera is 0.2, which is positive. If cross elasticity between 2 goods is positive, it means that they are substitutes (if price of 1 good increases, demand for the other good increases).

Correct option (D).

Cross elasticity of 0.2 means, if price of digital camera increases 1%, quantity demanded (number) of camcorder increases 0.2%.

So,  if price of digital camera increases 20%, quantity demanded (number) of camcorder increases (20 x 0.2) = 4%.