QUESTION 3

Using the concept of a change in demand and/or supply, graphically represent and explain three ways in which a market can be in surplus. Explain how the market adjusts to remove the surplus 3 Marks

QUESTION 4

1. A study has estimated that travel in economy class has a price elasticity of demand of 0.75 whilst travel in business class has a price elasticity of demand of 0.4. Explain what the values imply and why are they different.2 Marks

2. Name 2 goods you normally purchase that has an elastic price elasticity of demand and 2 goods whose price elasticity of demand is inelastic. Explain why?2 Marks