Calculate the cross-elasticity of demand for mutton

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Question 4a: If the price of mutton increases from $15/kg to $20/kg, the demand for beef rises from 100 kg to 150kg while the quantity demand of mutton reduces from 50kg to 30kg. Q4 ai) Calculate the cross-elasticity of demand (CED) for mutton and beef. Q4 aii) Therefore, mutton & beef are: a) inferior goods b) normal goods c) substitute d) complements e) price elastic or f) price inelastic. Q4 aiii) Calculate the price elasticity of demand (PED) for mutton. Q4 aiv) Is mutton price elastic or inelastic? Explain. Q4 av) If the mutton farmers want to raise the Total Revenue, shall they raise or lower the price of mutton?

Reference no: EM133364281

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