Question: QUESTION TWO (a) Given a demand function of the linear form: Q=1000-20p. Calculate and interpret the point elasticity of demand when p=100 and Q-800 and

QUESTION TWO
(a) Given a demand function of the linear form:
Q=1000-20p. Calculate and interpret the point elasticity of demand when p=100 and Q-800 and discuss the importance of the concept of elasticity of demand to managers and government (10marks)
(b) Explain the concept the law of variable proportions and its reliance in management of a firm.
(5marks)

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