Suppose that you are a staff economist with an economic consulting firm. The operator of a local harbor has commissioned your fi
rm to do a market analysis of the demand for berths (parking spaces) for boats. Your firm finds that the cross-price elasticity between berths and boat fuel is -2.15. You've just completed your study of elasticities and are asked to make a recommendation based on this information. If the price of boat fuel in the area increases by 4% with no change in the price of a berth, the quantity of berths that people demand will:
The result is that after a 4% increase in the price of fuel, the quantity of berths will decrease in 8.6%.
Explanation:
Cross-Price Elasticity is the result of the division between the porcentual changes in quantity of the good X (in this case berths) against porcentual changes in the price of good Y (in this case the price of fuel). In this case they are complementary goods, and an increase in one will decrease the quantity of the other.
Pioneers of Renaissance Humanism were inspired by the discovery and spread of important classical texts from ancient Greece and Rome which offered a different vision of life and humanity than what had been common during previous centuries of Christian domination
