1.Given the demand function for Crust Bread: P = 4 - Q/2, if the price of bread increases from 1 to 2, what would be the change in consumer surplus? Sketch the graph and calculate the change in consumer surplus.

2.The government decides to give a subsidy to the company. If the demand for Crust Bread is price elastic, how will total revenue for bread change as a result of the government subsidy? Explain.

3.Define price elasticity of supply and explain three factors affecting price elasticity of supply. Are those factors relevant for Crust Bakery?