Antonio Conti consumes 2 pounds of beef per week when beef is $4.50 per pound and 3 pounds of chicken when chicken sells for $ 3.50 per pound. If the price of chicken increases to $ 4.00 per pound, Conti’s consumption of beef increases to 2.5 pounds per week. Which of the following most accurately describes Conti’s cross elasticity of demand for beef versus chicken The cross elasticity of demand for:（）
A. beef relative to chicken is +1.67 and beef and chicken are complimentary goods.
B. beef relative to chicken is +1.67 and beef and chicken are substitutes.
C. chicken relative to beef is +1.75 and beef and chicken are substitutes.
参考答案：B
解析：
The average quantity of beef demanded is (2.0+2.5)/2=2.25 pounds, so the percentage change in the quantity of beef demanded is (2.5-2.0)/2.25=22.22%. The average price of chicken is ($3.50+$4.00)/2=$3.75 per pound, so the percentage change in the price of chicken ($4.00-$3.50)/$3.75=13.33%. The cross elasticity of demand for beef relative to the price of chicken is 22.2/13.3=1.67. Since the cross elasticity is positive, chicken and beef are substitutes for Conti.