Question 7

Suppose that the price of a product increased from $18 to $22, and the quantity demanded decreased from 63 to 57.

a.What is the price elasticity of demand?

b.What does this suggest about this product?

Question 8

A decade-long economic boom and additional investment spending in green technology is one reason for the stress on electrical grids. "Canadian consumers have spent heavily on electricity-guzzling appliances, boosting demand for electricity faster than capacity is being added and suppliers react to meet this increased capacity."

Analyze this quote using a supply and demand diagram. Market: electricity.

Question 9

Stuff-Crust Pizza is a new pizza introduced by Pizza Hut. What happens to the equilibrium price and equilibrium quantity of Stuff Crust Pizza in each of the following situations?

a. Due to weather conditions, crop yields (including wheat) decreased.

b. The price of beer decreased

c. Domino's Pizza introduced a similar type of pizza that sold for $1 less than the one by Pizza Hut.

d. A recession reduced households' income.

e. A new oven technology reduced the time it takes to bake a pizza