This post calculates the increase in chocolate syrup sales.
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A grocery store notices that the cross-price elasticity between ice cream and chocolate syrup is -.3. The store is advertising a sale with ice cream prices reduced by 20%. By how much should they expect chocolate syrup sales to increase?
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Solution Summary
The solution calculates the increase in chocolate syrup sales.
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This would be set up by the following equation:
Cross elasticity of ...
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