Cross-price elasticities Rice & beans (-0.35) Rice & wheat (0.6) Rice & chicken (-0.1)…
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.)