When the price of flowers increased from $5.00 to $5.70, the quantity demanded of chocolate increased from 5,550 to 6,150. What is the estimated cross-price elasticity of demand for chocolate? Round your answer to the nearest hundredth.

The Cross Price Elasticity of Demand measures the degree at which the quantity demanded for one commodity changes with a change in price of another product. If the two products in comparison show a positive cross elasticity of demand, then both products are substitutes of each other , while a negative results shows both are complementary of each other.

Cross Price Elasticity of Demand= ΔQx/Qx /ΔPy/Py

Cross Price Elasticity of Demand = (Q1x – Q0x) / (Q1x+ Q0x) ÷ (P1y – P0y) / (P1y + P0y),

Q0X = Initial demanded quantity of commodity X =5500

Q1X = Final demanded quantity of commodity X, = 6150

P0Y = Initial price of commodity Y = $5.00

P1Y = Final price of commodity Y= $5.70

Cross Price Elasticity of Demand = (Q1x – Q0x) / (Q1x+ Q0x) ÷ (P1y – P0y) / (P1y + P0y)

= (6150 -5000)/ (6150+5000)/(5.70-5.00)/(5.70 +5.00)

(1,150/11,150)/(0.7/10.7)=0.103139/0.065420= 1.5765 to the nearest hundreths = 1.57

A positive value 0f 1.57 for cross elasticity of demand shows that there is a competitive relationship between chocolate and flowers.