Which coffee has higher short-run price elasticity of demand

Reference no: EM13902393

The table below shows the retail price and sales for instant coffee and roasted coffee for two years.

a. Using these data alone, estimate the short-run price elasticity of demand for roasted coffee. Derive a lin- ear demand curve for roasted coffee.

b. Now estimate the short-run price elasticity of demand for instant coffee. Derive a linear demand curve for instant coffee.

c. Which coffee has the higher short-run price elas- ticity of demand? Why do you think this is the case?

Reference no: EM13902393

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