Given the demand equation: P=Q100 + 150 a) (i) Define price elasticity of demand. (ii) Given...

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Given the demand equation: P=Q²100 + 150 a) (i) Define price elasticity of demand. (ii) Given the equation above, find the price elasticity of demand when Q=4. d) (iii) Given the price elasticity of demand in (ii), estimate the percentage change in price needed to increase quantity demanded by 10% and interpret your answer. (3 marks) b) If the demand for petrol is price inelastic, what effect will an increase in price of petrol have on total revenue petrol producers? Discuss using a diagram. (6 marks) c) Given the demand function Q = 500 - 3P-2PA + 0.01Y (3 marks) (4 marks) Where P = 20, PA = 30 and Y = 5000, find: Note: P is the price of the good, PA is the price of an alternative (related) good, Y is income 1. The price elasticity of demand (2 marks) ii. The cross-price elasticity of demand (2 marks) (2 marks) Income elasticity of demand iv. If incomes rise by 5%, calculate the corresponding percentage change in demand. Is this good an inferior, a normal or a superior/luxury good? (2 marks) Using examples, discuss 4 factors that influence the price elasticity of demand. (16 marks) Given the demand equation: P=Q²100 + 150 a) (i) Define price elasticity of demand. (ii) Given the equation above, find the price elasticity of demand when Q=4. d) (iii) Given the price elasticity of demand in (ii), estimate the percentage change in price needed to increase quantity demanded by 10% and interpret your answer. (3 marks) b) If the demand for petrol is price inelastic, what effect will an increase in price of petrol have on total revenue petrol producers? Discuss using a diagram. (6 marks) c) Given the demand function Q = 500 - 3P-2PA + 0.01Y (3 marks) (4 marks) Where P = 20, PA = 30 and Y = 5000, find: Note: P is the price of the good, PA is the price of an alternative (related) good, Y is income 1. The price elasticity of demand (2 marks) ii. The cross-price elasticity of demand (2 marks) (2 marks) Income elasticity of demand iv. If incomes rise by 5%, calculate the corresponding percentage change in demand. Is this good an inferior, a normal or a superior/luxury good? (2 marks) Using examples, discuss 4 factors that influence the price elasticity of demand. (16 marks)

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PQ10Q150 Ai Price Elasticity of demand is the Percentage change in quantity demanded due to Percenta... View the full answer