2. Suppose own price elasticity of demand for pork is -2.13; that for fish is-1

Question

2. Suppose own price elasticity of demand for pork is -2.13; that for fish is-1 and for wheat is -0.25. Now answer the following questions (21 points, 3 points each) (a) Using the definition of elasticity, how much will be the increase in quantity demanded for pork if pork's price falls by 10 percent? (b) Using the definition of elasticity, how much will be the increase in quantity demanded for fish if fish's price falls by 10 percent? (c) Using the definition of elasticity, how much will be the increase in quantity demanded for wheat if wheat's price falls by 10 percent? (d) Depending on price elasticity of demand of pork, fish, and wheat, which is elastic, which is inelastic? Elastic: Inelastic (e) how would total revenue to pork industry be affected if price of pork decreases? (circle one) (i) total revenue would increase (ii) total revenue would not change (lii) total revenue would decrease (iv) all of the above (v) none of the above 8l Page

Explanation / Answer

2. Suppose own price elasticity of demand for pork is -2.13; that for fish is-1 and for wheat is -0.25. Now answer the following questions (21 points, 3 points each) (a) Using the definition of elasticity, how much will be the increase in quantity demanded for pork if pork's price falls by 10 percent? (b) Using the definition of elasticity, how much will be the increase in quantity demanded for fish if fish's price falls by 10 percent? (c) Using the definition of elasticity, how much will be the increase in quantity demanded for wheat if wheat's price falls by 10 percent? (d) Depending on price elasticity of demand of pork, fish, and wheat, which is elastic, which is inelastic? Elastic: Inelastic (e) how would total revenue to pork industry be affected if price of pork decreases? (circle one) (i) total revenue would increase (ii) total revenue would not change (lii) total revenue would decrease (iv) all of the above (v) none of the above 8l Page

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