1. The price of elasticity of demand for a commodity is -2. What would be the change in quantity demanded, if price increases by 30 %?

2. A decrease in cost of producing X per unit reduces the price of X per unit. As a result, the demand for good Y increases. Are good X and Y complements, substitutes, both, or neither?

3. Suppose a recent research finds that an increase in consumption of a good reduces the risk of diabetes. Would this report increase or decrease demand for the good?

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1 Given that the price elasticity of demand PED is 2 a 30 increase in price would resul... View the full answer