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To make a case of cookies, Walker Shortbread Company uses 10

To make a case of cookies, Walker Shortbread Company uses 10 pounds of butter, 20 pounds of flour, 5 pounds of sugar, and 10 ounces of salt. Currently, butter costs $1.50/lb, flour costs 25¢/lb, sugar costs 50¢/lb and salt costs 80¢/lb (or 5¢ per ounce).

Which input demand is most elastic, and which is least elastic?

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Which input demand is most elastic, and which is least elastic?

-- The most elastic demand input is the sugar, because there are many substitutes to sugar, many of which taste exactly like actual sugar. Raw sugar, organic sugar, and sugar substitutes can all be used in place of the current sugar. Currently, the sugar costs 0.50 per pound. Because this is the most elastic ...

Solution Summary

To make a case of cookies, Walker Shortbread Company uses 10 pounds of butter, 20 pounds of flour, 5 pounds of sugar, and 10 ounces of salt. Currently, butter costs $1.50/lb, flour costs 25¢/lb, sugar costs 50¢/lb and salt costs 80¢/lb (or 5¢ per ounce).

Which input demand is most elastic, and which is least elastic?

$2.19