Question 3 a. Calculate the cross-price elasticity of demand for porridge oats and milk sold in...

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Question 3 a. Calculate the cross-price elasticity of demand for porridge oats and milk sold in a supermarket if at the end of last period, the price of the porridge oats rose from $150 to S210 and the demand for milk sold, moved from 200 units sold to 180 units. State whether you think these two goods are complements or substitutes. b. Consider the case where the manager of KFC finds that the number of two-piece meals consumed per week fell from 1200 to 1000 boxes when the price of its meals was increased from $400 to $520. i) Calculate the price elasticity of demand. Show your calculations. i) If the KFC manager wishes to raise revenue, what is the appropriate action to take? (4 marks) c. Given that the demand function for banana chips may be written Qd=200-3p, where p is the price for banana chips, and the supply may be written as Qs= 30+2p. Determine the equilibrium price and quantity Question 3 a. Calculate the cross-price elasticity of demand for porridge oats and milk sold in a supermarket if at the end of last period, the price of the porridge oats rose from $150 to S210 and the demand for milk sold, moved from 200 units sold to 180 units. State whether you think these two goods are complements or substitutes. b. Consider the case where the manager of KFC finds that the number of two-piece meals consumed per week fell from 1200 to 1000 boxes when the price of its meals was increased from $400 to $520. i) Calculate the price elasticity of demand. Show your calculations. i) If the KFC manager wishes to raise revenue, what is the appropriate action to take? (4 marks) c. Given that the demand function for banana chips may be written Qd=200-3p, where p is the price for banana chips, and the supply may be written as Qs= 30+2p. Determine the equilibrium price and quantity

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Change in quantity of commodity X Change in price of commodity Y change in Qd of milk 200 180 200 x ... View the full answer