1.

I.Prior to a price and quantity demanded for a product were $10 and 100 respectively. After the price increase, they were $15 and 80.

a)Calculate the elasticity of demand.

b)Is the demand elastic or inelastic over this region?

II.Two drivers - Joan and Rob - each drive up to a gas station. Before looking at the price, each places order. Joan says, " I'd like 40 litres of gas." Rob says, "I'd like $40 worth of gas." What is each driver's price elasticity of demand?