FORMATIVE ASSESSMENT ACTIVITY $17$: ELASTICITY

Read the scenarios below and answer the questions that follow US $242910$ SO$1$ AC$4$

$[$Total: $15]$

$1.$ Rain spoils a strawberry crop. As a result, the price per box rose from R$30$ to R$40$ and the quantity demanded decreased from $1000$ to $600$ boxes per week. Over this price range:

$1\mathrm{.}1$ What is the price elasticity of demand? $(4)$

$1\mathrm{.}2$ Describe the demand for strawberries. $(2)$

$2.$ Most studies have found that in the short term a $10\%$ increase in petrol prices is associated with a $1-2\%$ drop in the quantity of petrol purchased. Assume that in one$-$year $2012$ the average retail petrol price jumped from R$11\mathrm{.}70$ to R$12\mathrm{.}90$ a litre, yet petrol consumption dropped by $3\mathrm{.}5\%.$

$2\mathrm{.}1$ Given what most studies have found, what is the price elasticity of demand for petrol? $(4)$

$2\mathrm{.}2$ What does the data in $2012$ imply?

$(3)$

$2\mathrm{.}3$ What do you think might account for the difference? $(2)$