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Homework answers / question archive / Instructions With all of this in mind and given what you have learned in module 5, please review Table 1 below that shows the estimated price elasticity of demand for various food categories and answer the following questions

Instructions With all of this in mind and given what you have learned in module 5, please review Table 1 below that shows the estimated price elasticity of demand for various food categories and answer the following questions

Economics

Instructions

With all of this in mind and given what you have learned in module 5, please review Table 1 below that shows the estimated price elasticity of demand for various food categories and answer the following questions. 

  • Select and food category from the table and explain if it has very inelastic, somewhat inelastic, elastic or very elastic demand and why you thin that is the case.
  • Does it surprise you? Why or why not?
  • Based on your knowledge of the price elasticity of demand, do you think taxing this product or service is beneficial? Why or why not? Hint: think about total revenue and about consumer surplus versus social surplus.
  • Find an example of a product or service that has the opposite type of price elasticity of demand (not from the table so this will require some thinking and research) and explain why.

 

  1. Post your answer to at least two of these questions.
  2. After posting to the discussion, please be sure to comment on what you like about at least two other students’ posts. 

TABLE 1

US Price Elasticity Estimates, by Food and Beverage Category, from 1938–2007

Food and Beverage

Absolute Value of Mean Price Elasticity Estimate

Food away from home (restaurant meals and fast food)

0.81

Soft drinks

0.79

Juice

0.76

Beef

0.75

Pork

0.72

Fruit

0.70

Poultry

0.68

Dairy

0.65

Cereals

0.60

Milk

0.59

Vegetables

0.58

Fish

0.50

Fats/oils

0.48

Cheese

0.44

Sweets/sugars

0.34

Eggs

0.27

 

Note. Values were calculated based on the 160 studies reviewed. Absolute values of elasticity estimates are reported. The price elasticity of demand measures the percentage change in purchased quantity or demand with a 1% change in price.

Table is from The Impact of Food Prices on Consumption: A Systematic Review of Research on the Price Elasticity of Demand for Food by Tatiana Andreyeva, PhD, Michael W. Long, MPH, and Kelly D. Brownell, PhD

 

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