00:01
So here we are told two things.
00:02
We know that there's a percentage change in the price of cereal of 25%.
00:08
We also know that there's a percentage change in the quantity of milk by minus 50%.
00:14
Right.
00:15
So this defines a cross price elasticity, right? so a cross price elasticity is between two goods.
00:27
And we do have two goods here, right? we have cereal and milk.
00:32
So an own price elasticity would be looking at one good, the price of cereal versus the quantity of cereal, the price of milk versus the quantity of milk.
00:39
But here we have a cross price elasticity that tells us how much the quantity of milk changes in response to the change in the price of cereal.
00:47
Right.
00:48
So if i plug into this, that would give me a minus 50 % change in the quantity of milk happens in response to a 25 % change.
00:59
Percent increasing the price of cereal gives me a cross -price elasticity between cereal, between cereal i can't spell today, i can never spell really, and milk of two percent...