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According to U.S. Department of Agriculture econominist Karl Fox, "An increase of 10 percent in the farm price of the "average" food product would be associated something like a 4 percent increase in the retail price and perhaps a 2 percent decreases in per capita consumption."
a. Is the price elasticity of demand different at the farm level than at the retail level? Why?
b. What are the respective elasticity coefficient?
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