Question: 1. Explain whether thestatement is True, False or Uncertain. Includediagrams where appropriate. If thesupply is perfectly inelastic, then a shift in the demandcurve does not

1. Explain whether thestatement is True, False or Uncertain. Includediagrams where appropriate.

If thesupply is perfectly inelastic, then a shift in the demandcurve does not affect the equilibrium price.

2. Consider the market for bicycles. The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.

Calculate the price elasticity of demand. Is it elastic or inelastic? Show all your work.

3. Consider the market for bicycles.The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.

How istotal revenue affected by the change in price? Show all your work.

4. Consider the market for bicycles.The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.

What additional information would you need to consider if you wanted to understand the relationship between scooters and bicycles?

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