Answer to Question #87896 in Microeconomics for Ariba mahbub

Question

Potatoes are used in the production of frozen french fries which are increasing in popularity in China as the number of fast food restaurants grow

The elasticity of supply of frozen french fries is liked to be more elastic then the elasticity of supply of fresh potatoes. Do you agree with it? Give your reasons

Answer 1

yes, I agree with the given statement.frozen french fries can be difine like some luxury goods

One of the factors of the price elasticity of demand (in this case it the same as supply) is to classify goods as luxury items or necessities: the demand for essential goods is inelastic or less elastic; the demand for luxury goods is elastic as a person can refinance the purchase of luxury goods or even refuse from it at all.