Higher rice elasticity of demand-bread or lettuce

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Reference no: EM13888413

In the spring of 2002, lettuce price doubled from about $1.5 to $3 per head. The reaction of one consumer was quoted in newspaper article; "I will not buy lettuce when it is a $3 a head" she said, adding that other green vegetable can fill in for lettuce. "if bread were a loaf we'd still buy it. But lettuce is not that important in our family".

For a consumer's household, which product has higher rice elasticity of demand, bread or lettuce, explain?

Is the cross-price elasticity of demand between lettuce and other green vegetables positive or negative, why?

Reference no: EM13888413

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