# Step-by-Step Solution The problem involves calculating percentage changes and cross-price elasticity using the midpoint (arc elasticity) formula. --- ## **Given:** - Price of large pizza decreases from **$16.00 to $12.00** - Quantity demanded of skateboards increases from **250 to 270** --- ## **Part 1: Percentage Change in Price of Pizza** ### **Midpoint Formula:** \[ \text{Percentage Change} = \frac{\text{New Value} - \text{Old Value}}{\frac{\text{New Value} + \text{Old Value}}{2}} \times 100 \] ### **Plug in the values:** - Old Price = $16.00 - New Price = $12.00 \[ \text{Percentage Change in Price} = \frac{12 - 16}{\frac{12 + 16}{2}} \times 100 = \frac{-4}{14} \times 100 = -28.57\% \] **Final Answer:** \[ \boxed{-28.57\%} \] --- ## **Part 2: Percentage Change in Quantity Demanded of Skateboards** ### **Plug in the values:** - Old Quantity = 250 - New Quantity = 270 \[ \text{Percentage Change in Quantity} = \frac{270 - 250}{\frac{270 + 250}{2}} \times 100 = \frac{20}{260} \times 100 = 7.69\% \] **Final Answer:** \[ \boxed{7.69\%} \] --- ## **Part 3: Cross-Price Elasticity of Demand** ### **Formula:** \[ \text{Cross-Price Elasticity} = \frac{\text{Percentage Change in Quantity Demanded of Skateboards}}{\text{Percentage Change in Price of Pizza}} \] \[ = \frac{7.69\%}{-28.57\%} = -0.27 \] **Final Answer:** \[ \boxed{-0.27} \] --- ## **Summary Table** | Part | Calculation | Answer | |------|-------------|--------| | 1 | Percentage change in price | -28.57% | | 2 | Percentage change in quantity | 7.69% | | 3 | Cross-price elasticity | -0.27 |