22nd November marks the day when Americans celebrate Thanksgiving Day. However, the cost of this celebration has increased by 11% in the last year according to figures from the American Farm Bureau Federation. One of the main causes of this is the rise in turkey prices but other factors were important as well.
Thanksgiving dinner cost ‘up 11%’ BBC News Online (16/11/07)
|Using supply and demand analysis, illustrate the price changes for turkeys identified in the article.
|Consider possible factors that may have led to the price changes for turkeys identified in the article.
|Discuss the likely change in the quantity of turkeys demanded as a result of the price rise.
|What is the likely approximate value of the cross elasticity of demand for cranberry sauce with respect to the price of turkeys?