Q2. Economists illustrated five major types of price elasticity of demand that

products may show. In the light of the above answer the following:

(30 Marks)

A. Define price elasticity of demand.

B. Show with graph different types of elasticity.

C. If prices rise by 10% and it was found that Qd decreased by 5%, what type

of elasticity does the product exhibit.

D. If price elasticity of demand was found to be greater than 1, what would be

your decision to increase revenues?

E. If cross elasticity of demand was found to be negative, what is the relation

between the two products under investigation?