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Assignment on Chapter 6 - Elasticity Price of rice Q demanded of Demand for Income flour (per kg) Rice flour (kg) Wheat flour (monthly) Kg $40 100 200 $3000 $50 80 250 $4000 Use mid-point formula to calculate elasticities 1. 1. Calculate own price elasticity of rice flour. What is the implication of this value? 2. Calculate cross-price elasticity between rice flour and wheat flour. What does the value indicate? 3. Calculate the income elasticity of rice flour. What does this value tell you? 4. Calculate total revenues from rice flour at different prices. Comparing these revenues, can you predict whether rice flour is elastic or inelastic? How? 5. Explain why the elasticity of agricultural products is less than that of manufacturing or industrial products? What is the impact of this difference on the volatility of these two types of goods