5a. The price of chicken in January is $3 and 12 pounds are purchased. The price...

5a. The price of chicken in January is $3 and 12 pounds are purchased. The price of chicken in December is $6 and 11 pounds are purchased. Calculate the own price elasticity of demand. Explain to the delivery person so that they can understand if the demand for chicken is elastic or inelastic.

5b. The price of beef in May is $4.0 per pound and falls to $3.5 in July. The quantity of chicken consumed in May is 4,000 pounds and falls in July to 3,800 pounds. Calculate the cross price elasticity of demand. Explain to the delivery person so that they can understand if beef and chicken are substitutes or complements.

5c. A coffee cup costs $12 and people buy 5 coffee cups. The price elasticity of demand for coffee cup is -0.8. If the firm increases the price of a coffee cup by 5%, calculate the change in total expenditure. Explain your answer so that the person selling coffee would understand.

Expert Solution

Rahul Sunny answered 8 months ago

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