Short run and long run elasticity of demand?

Question

http://img92.imageshack.us/my.php?image=columnfi4.jpg

The table in the link shows retail price and sales for instant coffe and roasted coffe for 1997 and 1998.

A: using the data alone, estimate the short run price elasticity of demand for a roasted coffe. Derive A linear demand curve for roasted coffe.

B: now estimate the short run price elasticity of demand for instant coffee. Derive a linear demand curve for instant coffee.

C: Which coffee has the higher short run price elasticity of demand? Why do u think this is the case?

Answer 1

Year... Qi.... Pi.... Qr.... Pr

1997.. 150.. 810... 110... 600

1998... 45.. 880... 125... 540

Linear demand will be Q=a+bP

B:

For "instant":

150=a+810b

45=a+880b

After solving this system you will get:

a=1365

b= -1.5

Qi= 1365 -1.5Pi

Ei=PδQ / QδP = -1.5Pi/Qi

Ei(1997) = - 1.5*810/150 = -8.1

Ei(1998) = - 1.5*880/45 = -29.33

A:

Same way for "roasted":

110=a+600b

125=a+540b

Qr=260 -0.25Pr

Er=PδQ / QδP = -0.25Pr/Qr

Er(1997) = - 0.25*600/110 = -1.364

Er(1998) = - 0.25*540/125 = -1.08

C:

Higher elasticity of demand has "instant" coffee (it currently is at more elastic segment). (due to higher availability of substitutes ?)

P.S. Actually inflation, income effect, advertisement, preference changes, market dynamics should be considered too in deriving demand between these years.