A suburban gym raises the price of its annual membership by 8%, resulting in a 12% fall in the quantity of gym memberships demanded. Consequently, a nearby yoga studio experiences a 16% increase in the demand for its classes.
Which one of the following combinations of elasticities represents these events?
Price elasticity of demand for gym memberships: −1.5-1.5−1.5; Cross price elasticity of demand for yoga classes with respect to the price of gym memberships: 2.02.02.0
Price elasticity of demand for gym memberships: −1.5-1.5−1.5; Cross price elasticity of demand for yoga classes with respect to the price of gym memberships: −2.0-2.0−2.0
Price elasticity of demand for gym memberships: −0.67-0.67−0.67; Cross price elasticity of demand for yoga classes with respect to the price of gym memberships: 0.50.50.5
Price elasticity of demand for gym memberships: −0.67-0.67−0.67; Cross price elasticity of demand for yoga classes with respect to the price of gym memberships: −0.5-0.5−0.5
256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.