Microeconomic analysis of the demand of tortilla in the towns of Colima and Villa de Alvarez in the State of Colima

Juan Manuel Sánchez Vázquez, José Manuel Rocha Escalante, Rodolfo Mariano Rodríguez Ramos
2008 Portes: Revista mexicana de estudios sobre la Cuenca del Pacífico  
After the increase in the demand for corn to produce ethanol last year, the international price of corn went up by 65%, which in turn made the tortilla price to go up between 40% and 100%. In response, both the federal and local governments triggered urgent actions to keep prices from increasing and affecting poor people. The purpose of this paper is to determine the factors that compose the demand function of tortilla. In addition, we want to specify the effect of a change in each of those
more » ... n each of those factors. In particular, we wish to find out the effect of a price change in the consumption of tortilla. We conclude that in Colima- Villa de Álvarez the demand for tortilla has almost null price-demand elasticity. The main reason is that the tortilla is an inferior good in the sense that a price increase affects more to poor families than to rich ones.
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