Cross-price elasticities

Rice & beans (-0.35)

Rice & wheat (0.6)

Rice & chicken (-0.1)

Rice & milk (-0.05)

Rice & other goods 0

Income elasticity of demand for rice (0.4)

Questions:

D) How much would the price of rice have to decrease in order to increase rice consumption by 5%?

E) What would happen to bean consumption as a result of a 10 percent decrease in the price of rice? (Make sure to mention the direction and magnitude of the impact.)

F) What would happen to chicken consumption as a result of a 10 percent increase in the price of rice? (Make sure to mention the direction and magnitude of the impact.)

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