Question: Question 2 A. Explain the following terms and show how each is calculated: i. Price elasticity of demand (4 marks) 1i. Cross price elasticity of

Question 2 A. Explain the following terms and show how each is calculated: i. Price elasticity of demand (4 marks) 1i. Cross price elasticity of demand (4 marks) B. Relate TWO (2) ways that knowledge of price elasticity can benefit a storekeeper. (6 marks) C. Consider the following: i. If the cross-price elasticity of demand between two goods is +2, how would you describe the relationship between the two goods? (3 marks) ii. If the price of one of these goods is reduced by the storekeeper, how would it affect the demand for the other good? (3 marks) (Total 20 marks)

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