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with respect to price of Demand for Rice and Pasta Nonwhite bread White bread White bread -0.42 0.84 -1.54 Table 1: Elasticities of demand for white bread (a) Does the average American household tend to consume white bread with rice and pasta, o

with respect to price of Demand for Rice and Pasta Nonwhite bread White bread White bread -0.42 0.84 -1.54 Table 1: Elasticities of demand for white bread (a) Does the average American household tend to consume white bread with rice and pasta, o

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In a 2012 report, the Economic Research Service at the U.S. Department of Agriculture (USDA) made the estimated price elasticities with respect to white bread, reported in Table 1. Demand for White bread with respect to price of Rice and Pasta Nonwhite bread White bread -0.42 0.84 -1.54 Table 1: Elasticities of demand for white bread (a) Does the average American household tend to consume white bread with rice and pasta, or consider them alternatives? Explain. (b) Americans currently buy 1.5 billion packages of white bread. The Bureau of Labor Statistics estimates that the average price of nonwhite bread will increase by 1.3% in the U.S. How many packages of white bread do you expect Americans to buy as a result of this price increase? (c) Iggy's Bread currently sells a loaf of white bread for $4, and is considering a plan to raise the price to $4.15 per loaf. Would this increase or decrease its revenue from white bread?
Transcribed Image Text:In a 2012 report, the Economic Research Service at the U.S. Department of Agriculture (USDA) made the estimated price elasticities with respect to white bread, reported in Table 1. Demand for White bread with respect to price of Rice and Pasta Nonwhite bread White bread -0.42 0.84 -1.54 Table 1: Elasticities of demand for white bread (a) Does the average American household tend to consume white bread with rice and pasta, or consider them alternatives? Explain. (b) Americans currently buy 1.5 billion packages of white bread. The Bureau of Labor Statistics estimates that the average price of nonwhite bread will increase by 1.3% in the U.S. How many packages of white bread do you expect Americans to buy as a result of this price increase? (c) Iggy's Bread currently sells a loaf of white bread for $4, and is considering a plan to raise the price to $4.15 per loaf. Would this increase or decrease its revenue from white bread?
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