Suppose that we are thinking about a farmers market for mangos. As the price adjusts, sellers are able to see all the sales they are able to make at these given prices. This produces a demand schedule for mangos given by: Price Quantity $5.00 0 $4.50 12 $4.00 30 $3.50 55 $3.00 90 $2.50 135 $2.00 190 $1.50 255 $1.00 330 $0.50 415 $0.00 510 10. Suppose that the price drops from $3.00 to $2.50. Calculate the elasticity of demand for this part of the demand curve. (Hint: use the $3.00 and $2.50 as the reference points to get your p and Q values). Show your work. [2 points] 11. Is demand elastic, inelastic, or unit elastic in this portion of the demand curve. How do you know? [1 point] Note that for each $0.50 drop in the price, the quantity is actually increasing at an increasing rate. To see this, for example, compare the change in Q when you go from $4.50 to $4.00 and when you go from $1.00 to $0.50. 12. Given that the quantity purchased is actually increasing by a lot more as the price gets lower for a given $0.50 change, does this mean that demand is getting more elastic as the price is dropping? Why or why not? Show your work. [3 points] Now suppose that the price of mangos has settled at $3.00 with 90 mangos being sold. At the same market, there are sellers who have been selling papayas for $5.00 each. But now, the price of papayas drops to $3.00 each. The mango sellers see the quantity of their mangos sold increase to 110 mangos sold. 13. Calculate the cross-price elasticity of mango sales (Quantity) with respect to the price of papayas. Show your work. [2 points] 14. Are mangos and papayas compliments or substitutes in this example. How do you know? [2 points