1. Definepriceelasticityofdemandandincomeelasticityofdemand.Explainwithexamplesfor the factors that determine whether a good has elastic or inelastic demand. (10m)

Definition (4m), explanation (4m), examples (2m) (use real life- brands as example)

2. Calculatethepriceelasticityofdemandforaproduct whenthepriceincreasesfrom$10to $15,andthequantitydemandeddecreasesfrom100unitsto80units.Interprettheresultandit implications for the firm. (10m)

Formula (2m), explanation (3m), calculation (5m)