Question
Elasticities Table 1. Estimated own price and cross-price elasticities of demand in the USA Product Own price elasticity Cross-price elasticity with respect to the price
Elasticities Table 1. Estimated own price and cross-price elasticities of demand in the USA
Product | Own price elasticity | Cross-price elasticity with respect to the price of vegetables |
Milk | -0.790 | -0.033 |
Meat | -0.758 | -0.095 |
Egg | -0.471 | +0.026 |
Juice | -1.165 | +0.037 |
Source: Bing-hwan Lin, Steven T. Yen, Diansheng Dong and David N. Smallwood, "Economic incentives for dietary improvement among food stamp recipients", Contemporary Economic Policy, Vol. 28, no. 4, October 2010, pp. 524-36.
Based on Table 1 above, fill in the blanks.
1. If the price of vegetables reduces by 20%, the quantity demanded of eggs decreases by [ Select ] ["0.52", "0.25"] %. (Hint: Use cross-price elasticity of demand concept)
2. If the milk price falls by 20% due to an oversupply of milk, the quantity demanded of milk would increase by [ Select ] ["15.80", "0.0158"] %. (Hint: Use the price elasticity of demand concept)
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