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Question: suppose a 5 decrease in the price of whole wheat...

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Suppose a 5% decrease in the price of whole wheat bread produces a 10% increase in demand for whole wheat bread and a 15% increase in demand for butter.

a) computer the demand elasticity for whole wheat bread.

b) define the cross elasticity of demand for butter w/ respect to bread as percentage change in butter demand /(divided) percentage change in the price of whole wheat bread. compute the cross elascticity of butter w/ respect to whole wheat bread.

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