Due to a supply chain disruption, the average price of brand-name coffee beans rises from £12.50 \pounds12.50\,£12.50 to £15.00 \pounds15.00\,£15.00 per kilogram. Consequently, the weekly sales of compatible espresso machines fall from 800 units to 680 units.
What is the cross elasticity of demand (XED) for espresso machines with respect to the price of coffee beans, and how are these two goods related?
−1.33-1.33−1.33, and they are complementary goods
+1.33+1.33+1.33, and they are substitute goods
−0.75-0.75−0.75, and they are complementary goods
+0.75+0.75+0.75, and they are substitute goods
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.