contestada

which do you think has a greater effect on the cpi: a 10 percent increase in the price of chicken or a 10 percent increase in the price of caviar? Why?

Respuesta :

Answer: 10% increase in price of Chicken.

Explanation:

Caviar is considered a LUXURY good which means that it is mainly sought after by the wealthier sections of the population while chicken is a product that reflects in the food basket of the AVERAGE person who believes it more important to satisfying their daily needs than caviar which is altogether more expensive anyway.

Since Chicken is many times more purchased than Caviar, an increase in the price of Chicken will definitely be felt and affect the CPI.