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Price P1 D Q1 * Quantity of toothpaste Figure 2 (a) Using supply and demand diagram in figure 2, draw and explain the effects to the toothpaste in the event of the price of toothbrush falls. For the event, identify: i. Which one is affected; demand or supply? ii. How it influences demand or supply. iii. What happens to the equilibrium price and quantity? [7 Marks] (b) When a person's income declines and, as a result, the demand for margarine increases. Is margarine a normal or an inferior good? Explain your answer. [3 marks] QUESTION 2 (8.5 Marks) The cab fare in Melaka Sentral is regulated. Recently, the state government decided to raise it from RM4.50 to RM5.00 per ride. The quantity demanded falls from 10 to 8 passengers per month. (a) What is the price elasticity of demand for cab rides in Melaka Sentral? (Use midpoint formula to calculate). (2.5 marks) (b) Is the demand for rides elastic or inelastic? Why? (2 marks) (c) Based on your answer in (ii), explain the cab driver's total revenue. (4 marks)