1. a. what are the effects of shifts in demand and supply on market prices and quantities? Use supply and demand diagrams to verify your answers.
b. i) describe four methods of measuring price elasticity of demand.
ii) list four factors that determine price elasticity of demand
c. how would the following changes in price affect total revenue?
That is, would total revenue increase, decline or remain unchanged?
i) Price falls and demand is inelastic
ii) Price rises and demand is elastic
iii) Price rises and demand is inelastic
iv) Price falls and demand is elastic
v) Price falls and demand is of unit elastic
d) suppose a university raises its tuition from US $ 3000 to US $3500. As a result, student enrollment falls from 5000 to 4500. Calculate the price elasticity of demand. Is demand elastic, unitary elastic or inelastic?
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