Calculate the cross elasticity of Demand:?

Question

Price of Beef ($)
80
70
60
50
40

Quantity of Mutton
1000
900
800
700
600

Price of Cars ($)
3000
2800
2600
2400
2200

Quantity of Petrol
6000
7000
8000
9000
10000

Answer 1

Cross elasticity of demand of Good A for Good B means:

When the price of Good B goes up (or down) by 1%, how much does purchase of Good A go up or down? Formulaically, an arc elasticity (between two points) is:

%change in quantity of Good A / %change in price of Good B

Alternatively, you could set up a differential equation if you know the slopes of both curves, but judging from the example this is going too far.

The best way to do this problem is to set up the formulas in an EXCEL spreadsheet and copy and fill. Or you could do by hand, in which case you'll never forget the formula.