A 25 per cent rise in the price of face masks decreases the quantity of face masks demanded by 15 per centand decreases the quantity of disposable gloves demanded by 10 per cent.

Question 2a)Calculate the Price elasticity of demand (PED) for face masks? Are face masks price elasticor price inelastic? Explain. If the face masks company would like to raise high revenue, should it raise or drop its price? Explain. (6 marks)

Question 2b)Calculate the Cross elasticity of demand (CED) for face masks and disposable gloves. Are face masks and disposable gloves complements or substitutes? Explain. (4 marks)

Q2c)Assuming Firm X's production schedule is as follows; fill in the blanks: (2 marks)

[Answer here]

Variable input (Labour Hour)	Total output (Q units)	Marginal Product (MP)	Average Product (AP)
5	50	10	10
10	90	8
15	120		8

Q2d)Assume you leave your job, where you earn $65,000 a year, to start your own business. You incur start-up costs of $120,000 and during your first year you earn revenue of $180,000. (3 marks) i) Calculate your accounting profit. ii) Calculate your economic profit. iii) From the economic point of view, is your start-up profitable?