"um-u. . u..- u--.\" l" u.-. n... QUESTION 3: 45 marks The Cycling Promotion Fund (CPF), Australia's peak bicycle promotion group, said because of the COVlD-19 pandemic use of bicycles increased by 10% last year, 4% more than expected. As a result, CPF is requesting the government to provide more incentives to encourage cycling as a means of transport. 3. Write a persuasive economic report to support CPF's request. Your report should include discussions ofIthe role of the following: i. the income elasticity of demand for bicycles. [10 marks] ii. the cross-elasticity of demand between bicycles and motor vehicles. [10 marks] iii. factors other than the price of petrol that might have influenced or influence demand for bicycles. [10 marks] illustrate your report with demand and supply diagrams. b. Suppose upon reading your report the government decides to pay a subsidy to bicycle producers. Use the demand and supply diagram to explain the impact of the subsidy on the equilibrium quantity and price of bicycles, and the efcrency of the bicycle market. [15 marks] 9 Type here to search