Price level.

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Chapter 2, Problem 8P

To determine

Price level.

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The prices and elasticities for some different types of food are summarised in Table 1. Table 1: Price elasticities of demand for different types of food. Food Categories Calories per serving Price per 100 g ($) Typical Spending per week ($) Price Elasticity of Demand (in absolute value) Fruit 660 0.4 2 1.13 Vegetables 140 0.35 3.5 0.85 Pasta 1550 0.4 3 0.88 Bread 950 0.6 2.5 0.29 Snacks 430 1.2 5 0.27 Candy 1750 0.7 8 0.30 Milk -A 2100 0.1 2.5 1.78 Milk -B 880 0.2 1.5 1.98 (a) Discuss the most possible cause for the difference in price elasticity of demand between milk (type B) and bread. (b) Suppose that a consumer currently spends on average $30 per month on high-calorie milk and that the price of high-calorie will milk increase by 10% next month.Estimatethe expected percentage change in the quantity demanded for high-calorie milk products. In addition, calculate the expected change in revenue for sellers of high-calorie milk firms after the price change.…

Consider the price elasticity of demand for potatoes vs houses. Which product has a larger price elasticity of demand and why? Please make sure you relate the most appropriate economic concepts and theory.

In this question, you'll have to solve for price elasticity of demand using the percent change formula. When the old price of a food package was $4.64 per package, the old quantity was 1,081 packages were sold each day. After the price increased to the new price $10.89 per package, sales dropped to a new quantity of 447 packages per day. Using these numbers, what is the price elasticity of demand for food packages? Round your answer to 3 decimal places.