Assume the price of apples increases from P20 to P25 and the quantity demanded falls

from 10 tons to 5 tons.

1. Calculate the elasticity of demand coefficient.

2. Calculate the elasticity of supply if the change in price caused quantity supplied to

increase from 10 to 25 tons.

3. Explain why the total revenue test cannot be used to determine elasticity of supply.

4. Assume the increase in the price of apples decreased the quantity demanded of vanilla

ice cream. Identify if these two products are substitutes or complements.

5. Assume the increase in the price of apples increased the quantity demanded of

peaches from 20 tons to 30 tons. Calculate the cross-price elasticity of demand.

6. Assume instead that a 10% increase in income caused the quantity demanded of

apples to decrease from 10 tons to 8 tons. Calculate the income elasticity of demand.