Question

7. If the supply elasticity of pork is 0.46, by how much will quantity supplied increase if price increases by three percent? Is the supply for pork elastic or inelastic? 8. If the income elasticity of demand for rice is -0.27, what effect will a four percent increase in income have on rice consumption? What can we infer about rice as a result of this elasticity calculation? 9. If cross-price elasticity for chicken with respect to the price of beef is 0.89, what effect will a five percent increase in the price of beef have on consumption of chicken? Are beef and chicken substitutes or complements?

Answer 1

0 POIK Elashuty of supply of Percentage change in Quant supplied of paik Perleninge Change in Price 0.46= Percentage change in Quantity Supplies + 3 - Percentage change in Quantity supplied = 1:38% Hence Quantity supplied a by 1:38/ The supply to park is Inelastic because the clashrity value is less than to Inconie elashe'ty of denoued = Percentage change in Quantity did Percentage change in intense Ź -,27 = Percentage change in Quanhty dd - 7 percentage chay dd Percentage change in Quantity = -27 XY --1084 So the Quantity of Rice Consumption will decrease by 1:08% so , Rice in interior 1. Negative good because my Relation b/o Incona and Quently dd.

Cross-price elasticity of I Z demand 1. Percentage change in Quanhing demand of Good & Percentage Change in . Percentage Change Good y hurt beef Mere aos price elasticity of Percentage change in demand fee chicken Quantity demand of . Chicken Percentage change in the price of beef 7 0.gq X5= Percentage chaugen Graunty demand of chicken 3 Percentage demand of chicken The Consumption of chicken will increased by 4045% Change in Oramble The Good is substitute because the con Elanhaily have positive valu le 0.89