Question 2 You are expert in demand analysis and advise to some retail outlets including petrol stations and Pizza Huts for possible responses of the consumers as these outlets increase prices. For example, when you're looking at something like a tank of gas, increase by $0.50 per gallon whether customers fill up or not? Similarly, if a slice of pizza that consumers purchase every day for lunch went up $0.50, would it affect the purchase? The sensitivity of price changes to quantity demanded is depicted in the graphs below: Change in Price of Gasoline Change in Price of Pizza fores $1.80- Price (per slice) Price (per gallon) $1.50- 81.30. $1.10- Quantity Demanded (per gallon) Quantity Demanded (per slice) Using the information above answers the following questions. a) How does increase the price of gasoline affect purchase of gasoline and purchase of pizza differently? (Hint: there are many substitutes for pizza, but not many substitutes for gasoline) (10 marks) b) Using information provided in the table below calculate Price Elasticity of Demand for Pizza and gasoline respectively and identify whether they are elastic, inelastic. (10) marks) PO OO Price per Pizza 5 5.50 6 4 slice ($) gasoline per gallon 2.00 2.50 20 19