When the price of milk rose 50%, the quantity of milk sold fell 25% and the sale of breakfast…

When the price of milk rose 50%, the quantity of milk sold fell 25% and the sale of breakfast…

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When the price of milk rose 50%, the quantity of milk sold fell 25% and the sale of breakfast cereal also
fell 25%.
1. Calculate the price elasticity of demand for milk. Show you calculations.
2. Calculate the cross elasticity of demand for breakfast cereal. Show your calculation.

Expert Answer:

Answer rating: 100% (QA)

1 To calculate the price elasticity of demand for milk we can use the formula Price Elasticity of De
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