Unformatted text preview: alarm MDealsm
,5 ' 27:77.34 % W 1. Think that you have opened a pastry shop in an ofﬁce area where people generally have to go to shop for their lunch. Explain the following. a) Let there is an increase in price of ﬂour, will the equilibrium change? Explain with
thegraph. UC£J (plQaph 6Y3 nﬂlﬁtpagﬂ . b) If the ofﬁces increase the lunch time, will it have any effect on the demand? Explain. UCL c) What will happen if a Cuban coffee shop opens next to it? d) Point out three factors that can increase the demand. e) Let the shop decided to give one pastry free on purchase of three. Is it change in supply or change in quantity supplied? Explain. @u a “flty J U Ppllw 2. Let suppose the following price and demand schedule of coffee and cake. a) Find out the elasticity of demand of both the goods when price chances from two to
ﬁve. b) Derive the same by mid point theorem?
c) Analyze the cross price elasticity in words for the goods and explain whether it will positive or negative. Pm in V6
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- Spring '08