ECON 218 – The population in your town consists of families with household pets
January 2nd, 2018
You are the only veterinarian in a small town; the next closest vet is 50 miles away. The population in your town consists of families with household pets and farmers with livestock. You have noticed that the farmers are less sensitive to price changes for vet services (diagnostic services) than the families with small pets. Specifically, you have found that the farmers have an own price elasticity of demand of-1.5 for diagnostic services and the families with small pets have an own price elasticity of-2.5. How can you use this information to your advantage? (The more specific your answer the more points you get.)