Price

Quantity consumed

Question 01

Suppose the market for fresh chicken is in equilibrium at a price of $4.00 per kilogram and a quantity of 4200kg per month. Now suppose that at a price of $4.50 per kilogram, quantity demanded falls to 3000 kg per month.

a.show the information in the given diagram? (01 mark)

b.Calculate the price elasticity of demand for fresh chicken between the prices of $4.00 and $4.50. Is the demand elasticity elastic or inelastic?(01 Marks)

c.Calculate the total revenue when the price is $4.00 per kg and $4.50 per kg.(01 mark)

d.Which elasticity do you think is suitable for a firm to increase the total revenue? Justify your answer. (02 Marks)

Question 0 2

Discuss five determinants of the Price Elasticity of Demand using examples.(03 Marks)

Question 03

Discuss five determinants of the Price Elasticity of Supply using examples.(03 Marks)

Questions 04

Explain the followings concept using the examples;

1. Income elasticity of Demand
2. Cross Price elasticity of demand
3. Complementary goods and inferiorgoods
4. Substitute and Income effect

Questions 05. Exercise Question No.01