Question: 2. Interpret the below given elasticities as per the example given below. (a) Price Elasticity of demand is -0.5 (6 points) (b) Cross price

2. Interpret the below given elasticities as per the example given below. (a) Price Elasticity of demand is -0.5 (6 points) (b) Cross price elasticity is 2.0 (c) Income elasticity is 1.5 Eg. Price Elasticity of demand is -3.0 Interpretation: For every 1% increase (decrease) in price, the quantity demanded decreased (increased) by 3%. The demand can be categorized as "elastic" in nature.

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