Sccot meclean

ood called "Widgets' . Widgets and Gizmos have a cross elasticity of demand equal to -1.4. All else equal, how would an increase in the price of Gizmos affect the revenue from Widgets? Explain. Question 3 (2.5 Marks): Consider a market that has a price above the equilibrium price. A) Represent this situation in a supply-demand diagram. B) Using your diagram as support, provide an explanation for why this market is not efficient. Please remember to use the concepts and terminology from the course. Question 4 (3 Marks): Consider a unit of a good that is exchanged between a producer and a consumer at a price of $13. The producer has a minimum price they are willing to accept of $10 per unit and the consumer has a maximum price they are willing to pay of $13. A) From the perspective of society, is this exchange a good outcome? Why or why not? B) Imagine that instead of the unit being exchanged for $13, the consumer is given the unit of the good for $0. What is the effect of this change on the economic surplus for society, the consumer and the producer? Date Question 1: A ) Price elasticity of demand