Question: I do not understand how to answer this question. The formula I have for Cross elasticity of demand = (percentage change in quantity demanded of

I do not understand how to answer this question. The formula I have for Cross elasticity of demand = (percentage change in quantity demanded of a good) / (percentage change in the price of its substitute or compliment). I don't understand how to use this formula to complete the question:

Suppose that in response to a 10 percent increase in the price of new luxury handbags the quantity

demanded of used luxury handbags increases by 4 percent. What would be the value of the cross-

price elasticity of demand between new and used handbags? Briefly explain how you derived your

answer.

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