Mel needs your help in understanding the following problem. The price of lettuce has increased slightly from R4.00 to R5.00, causing a fall in the quantities demanded from 100 to 80 per month. However, she also noticed a decrease in the demand for tomatoes, from 150kg to 120kg, even though no price changes have occurred. Can you help her understand this behaviour by seeing if a relationship possibly exists between these two goods
Mel needs your help in understanding the following problem. The price of lettuce has increased slightly from R4.00 to R5.00, causing a fall in the quantities demanded from 100 to 80 per month. However, she also noticed a decrease in the demand for tomatoes, from 150kg to 120kg, even though no price changes have occurred. Can you help her understand this behaviour by seeing if a relationship possibly exists between these two goods
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Mel needs your help in understanding the following problem. The price of lettuce has increased slightly from R4.00 to R5.00, causing a fall in the quantities demanded from 100 to 80 per month. However, she also noticed a decrease in the demand for tomatoes, from 150kg to 120kg, even though no price changes have occurred. Can you help her understand this behaviour by seeing if a relationship possibly exists between these two goods?
[Hint: Use the elasticity coefficient as a tool for your recommendation. Show all workings. Round your answer to 4 decimal points.]
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