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?© BrainMass Inc. brainmass.com October 10, 2019, 5:01 am ad1c9bdddf
This would be set up by the following equation:
Cross elasticity of ...
The solution calculates the increase in chocolate syrup sales.