i. Explain the values of price and income elasticity of demand for Fresh meat, foreign travel, and Bread, Beer, petrol and consumer durables.ii. With reference to the price elasticity values comment on their implications for pricing policies in the industries concerned. In business and economics, elasticity refers to the degree to which individuals,consumers, or producers change their demand or the amount supplied inresponse to price or income changes. It is predominantly used to assess thechange in consumer demand as a result of a change in a good or service's pricePrice elasticityProductIncome elasticityConsumer durable0.91.5goodsForeign travel1.83.3Bread0.1-0.2Milk0.20.0Fresh meat1.40.0Wine1.22.62(0.5 long run) (1.0, shortrun)Petrol1.3Вeer0.40.5

Elasticity is the measure of percentage change in one variable due to a percentage change in another…

Answered: Explain the values of price and income…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i. Explain the values of price and income elasticity of demand for Fresh meat, foreign travel, and Bread, Beer, petrol and consumer durables. ii. With reference to the price elasticity values comment on their implications for pricing policies in the industries concerned.

In business and economics, elasticity refers to the degree to which individuals,
consumers, or producers change their demand or the amount supplied in
response to price or income changes. It is predominantly used to assess the
change in consumer demand as a result of a change in a good or service's price
Price elasticity
Product
Income elasticity
Consumer durable
0.9
1.5
goods
Foreign travel
1.8
3.3
Bread
0.1
-0.2
Milk
0.2
0.0
Fresh meat
1.4
0.0
Wine
1.2
2.6
2
(0.5 long run) (1.0, short
run)
Petrol
1.3
Вeer
0.4
0.5

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