In the second-level of the nested CES demand system, consumers choose between a domestically produced and an aggregate imported high-value or low-value poultry product. So if imports become more expensive relative to domestically produced poultry, consumers will substitute away from imports. At the third-level, consumers choose between aggregate high-value and low-value poultry products. If the aggregate price of high-value poultry, which is a function of the price of imports and the domestic price of high-value poultry, increases relative to the aggregate price of low-value poultry, consumers will increase their consumption of low-value poultry and decrease their consumption.
