Question

Identify and explain two reasons why demand for cereals might be price elastic

Answer 1

Answer:

cereals are agricultural products. Agriculture productivity is seasonal in that there are times of bumper harvest as well as low harvest seasons due to varying conditions such as rainfall patterns . Therefore prices will be elastic due to the varying supply and demand levels of the cereals.

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Answer 2

Answer:

one of the reason is that the more substitutes are likely to have such as tea and coffee.

second is that there time period under consideration is long .

Explanation:

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