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When the price of lettuce doubled from $1.50 to $3.00 the reaction of one customer was, I will not buy lettuce when it is $3.00
When the price of lettuce doubled from $1.50 to $3.00 the reaction of one customer was, "I will not buy lettuce when it is $3.00 per head as other vegetables can be substituted for it. Lettuce is not that important to our family. But if the price of bread goes up to $5.00 a loaf I will still buy it." a) Which product has higher price elasticity of demand: lettuce or bread? (2) b) What will be the cross price elasticity of demand between Lettuce and other vegetables - positive or negative? Briefly explain. (2)
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