# Case Elasticities: Bread & Butter, Alcohol & Gum, etc.

• jalen
In summary, the case elasticities for the following goods are as follows:a) Bread and butter are complements.b) Alcohol and gum are unrelated.c) Peanut butter and jam are complements.d) Coffee and tea are complements.e) Margarine and butter are substitutes.
jalen
Identify the case elasticities for the following goods. Explain.
b)alcohol and gum
c)peanut butter and jam
d)coffee and tea
e)margerine and butter

a),c),d) --> complements

b) --> unrelated

e) --> substitutes

Never heard of "case elasticity."

Do you mean "cross elasticity"?

Are coffee & tea complements?

Do you need to report the sign of the cross elasticity? For example, "substitutes imply cross elasticity > 0"?

Oops, yep it's cross elasticity =)

I think coffee and tea are compliments but not sure if it's right though...

Not sure how to relate the signs with the info. Can you briefly explain what each one means and I'll post the answers to see if I get them right.

I am not sure which definition of "complements" and "substitutes" you are using. Can you post the definition for each?

## 1. What is a case elasticity?

A case elasticity is a measure of the responsiveness of demand for a product to a change in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

## 2. How is the case elasticity of bread and butter determined?

The case elasticity of bread and butter is determined by collecting data on the quantity of bread and butter demanded at different price points. This data is then used to calculate the percentage change in quantity demanded for each price change, and the case elasticity is calculated as the average of these values.

## 3. What factors can affect the case elasticity of alcohol?

The case elasticity of alcohol can be affected by factors such as consumer taste and preferences, availability of substitutes, income levels, and government policies (such as taxes or regulations).

## 4. Is the case elasticity of gum typically high or low?

The case elasticity of gum is typically high, meaning that a small change in price can lead to a relatively large change in demand. This is because gum is a non-essential and inexpensive product, so consumers are more likely to change their purchasing behavior in response to a price change.

## 5. How can case elasticities be used in business decision making?

Case elasticities can be used in business decision making to determine the optimal pricing strategy for a product. A product with a high case elasticity can benefit from a lower price point to increase demand, while a product with a low case elasticity may be able to sustain a higher price point without significant changes in demand.

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