What do you think will happen if the price of a dozen eggs (say a generic egg) and the price of a pound of beef (ground beef) increased by 20%? What do you think the consumer's response would be? Consider and discuss the substitutes that are available for each (are the substitutes for each similarly priced)?© BrainMass Inc. brainmass.com June 4, 2020, 2:33 am ad1c9bdddf
If the price of eggs and beef both increase by 20%, we will see a few things happen. The demand for eggs is more inelastic than the demand for beef, because there are fewer substitutes for eggs. When the price of beef increases, people find other substitutes, like chicken, pork, veal, other types of meat products. When the price of eggs increases, some people will stop buying and consuming eggs all-together, ...
The solution provides a detailed explanation of how a price increase in eggs and beef would affect demand. Substitutes for each product are also discussed.