6. Suppose that you are the owner of an ice-cream shop and that you have established that the price elasticity of the demand for ice-cream in your particular market is 1,8. Would you sell ice-cream at R10 per litre or R9 per litre? (2 marks) Explain (3 marks). 7. Prove that the utility approach and the indifference curve approach yield the same consumer equilibrium. (6 marks).

Bonus question.

8. The equation for the demand curve is Q = 450 - 25P and the equation for the supply curve is Q =

-175 + 37,5P, then work out the market equilibrium.