So here is the question.
Be sure to also include a calculation of the cross-price elasticity of the alternative energy source and oil. Assume the current price of oil is $50/gallon of crude oil. If the price increases to the profit-maximizing price, the quantity demanded of the alternative energy source increases by 20%. Explain if these goods are complementary goods, substitute goods, or non-related goods. If there is a relationship, indicate whether the relationship is weak or strong. Justify your answer with an explanation based on the elasticity figure.
is the 20% increase my q1 or my q2 and how do i determine what the other "q" is
P1 = 50 Q1?
P2 = 57.50 (this is my calculated profit maximizing market price) Q2?
I know the formula and understand the premise to calculate if I have all the fiqures.. It is (p2-p1)/p1*100
____________ = cross price elas dmnd
(q2-q1)/q1*100
Be sure to also include a calculation of the cross-price elasticity of the alternative energy source and oil. Assume the current price of oil is $50/gallon of crude oil. If the price increases to the profit-maximizing price, the quantity demanded of the alternative energy source increases by 20%. Explain if these goods are complementary goods, substitute goods, or non-related goods. If there is a relationship, indicate whether the relationship is weak or strong. Justify your answer with an explanation based on the elasticity figure.
is the 20% increase my q1 or my q2 and how do i determine what the other "q" is
P1 = 50 Q1?
P2 = 57.50 (this is my calculated profit maximizing market price) Q2?
I know the formula and understand the premise to calculate if I have all the fiqures.. It is (p2-p1)/p1*100
____________ = cross price elas dmnd
(q2-q1)/q1*100