Suppose that you are the manager of a soccer stadium where all the tickets always have to be sold at the same price. Two matches are scheduled to be played during the next fortnight, the first between sundown and pirates and the second between two division sides.

1.1 Market research indicates that you can sell 40 000 tickets for the sundown-pirates clash at R20 each, or 30 000 tickets at R40 each. Which option would you choose? What is the price elasticity of the demand for this game? (3)

1.2 Suppose that a change in the price of bread from R10 to R12, 50 leads to a change in the quantity demanded for bread from 65 units to 90 units. Use the arc elasticity method to interpret the cross-price elasticity of demand for the bread. (4)