If the price of mutton increases from $15/kg to $18/kg, the demand for beef rises from 100 kg to 150kg while the quantity demand of mutton reduces from 50kg to 30kg.
i) Calculate the cross-elasticity of demand (CED) for mutton & beef Ans
ii) Therefore, mutton & beef are: a) inferior goods b) normal goods c) substitute d) complements e) price elastic or f) price inelastic Ans:
iii) Calculate the price elasticity of demand (PED) for mutton. Ans: (
iv) Is mutton price elastic or inelastic? Explain Ans:
v) If the mutton farmers want to raise the Total Revenue, shall they raise the price of mutton? Ans:
