5 - 50 marks (2-5 sentences + calculations per question) Price Elasticity of Demand a. If a 10 per cent increase in the price of Kellogg's cereal causes a 25 per cent reduction in the number of boxes of cereal demanded, what is the price elasticity of demand for Kellogg's cereal? Is demand for Kellogg's cereal elastic or inelastic? (10marks) b. What is the advantage of the midpoint formula for calculating elasticity? (10marks) c. Briefly explain whether the demand for each of the following products is likely to be price elastic or price inelastic. (10marks) i. Milk ii. Frozen pizza iii. Cola drinks iv. Prescription medicine d. Research has estimated that the price elasticity of demand for soft drinks is -0.78, while the price elasticity of demand for Coca-Cola is -1.22. Coca-Cola is a type of soft drink, so why isn't its price elasticity of demand the same as the price elasticity for soft drinks as a whole? (10marks) e. Assume that the Australian Football League (AFL) reduces the prices of tickets by 50 per cent for tickets to games on Monday nights. The number of Monday night game tickets sold increased by 80 per cent. Is this