Question: NUMBER ONE Given the following demand function Qx = 100-2P (a) Calculate the price elasticity of demand when price is Ksh. 2 and when

NUMBER ONE Given the following demand function Qx = 100-2P (a) Calculate the price elasticity of demand when price is Ksh. 2 and when price is Ksh. 6 (8 marks) (b) Calculate the price elasticity of demand in the price range Ksh. 3 and Ksh. 5 (5marks) (c) If the current prevailing price is Ksh. 5 what advice would you give to the producer in order to increase his revenue, and why? (7 marks) NUMBER TWO (a) Define marginal utility and clearly explain the oxiom of diminishing marginal utility. (b) Illustrate and explain the following: (i) Consumer equilibrium under the cardinalist approach (ii) Consumer equilibrium under the ordinalist approach (6 marks) (7 marks) (7 marks) (Total: 20 marks)

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