(b) 'With an increase in population size and a rise in the level of income, both the private sector and the public sector are involved in building houses. In one country a private firm has built an extra 100 000 houses but, at the same time, its government has increased income tax significantly'. (i) Explain, using a demand and supply diagram, how these two actions affect the equilibrium price and the equilibrium quantity of houses. [6 Marks] (ii) Explain at least (3) three factors that determines the demand for houses. [6 Marks] (c) Using examples, explain the factors that are likely to affect the price elasticity of demand for a good. (a) A firm's demand function for good x is estimated as follows:- Qx = 1800 - 1/4Px + 1/8Py - 1/3Pz + 1/5Y Where Qx represents quantity demanded of good x, Px is price of good x, Py is price of good y, Pz is price of good z and Y is income. (i) State whether goods Y and Z are substitutes or complements for good X. Justify your answer. [5 marks] (ii) Explain whether the law of demand is satisfied in this equation.[5 marks] (b) Using appropriate diagram(s), discuss how an increase in the price of coffee would affect the demand of tea. [5 marks] (c) Using examples to illustrate your answer, explain the concepts of price elasticity of demand and income elasticity of demand. [5 marks] (d) Explain how a Business makes use at the concept of PEd (Price Elasticity of Demand), Yed (Income Elasticity of Demand) and Xed (Cross Elasticity of Demand) [10 marks] [10 Marks]