¡Fresh cream is a subistihnute for ice-cream and wafs a alls, one can expect tha
ID: 1141001 • Letter: #
Question
¡Fresh cream is a subistihnute for ice-cream and wafs a alls, one can expect that The demand for fresh cream wil al The demand for fresh cream wi noenin decease and The quantity of fresh cream demanded w The quantity of fresh cream demanded wel secrene snd e sann dend he denand or waflesill increase is it the price and the quantity of screwdhvers eschanged al al Demand for screwdrivers has increaned b) Demand for screwdriver, decreased c) Supply of screwdrivers has decreased di Supply of screwdrivers has increased it s lkeh 16 of apples causes farmers incumes to all This san esale a) Perfectly elastic demand b) Elastic demand d Unitary elasticity of demand Inelastic demand Which one of the foilowing statements is cosrect a Ifthe price elasticity of the demand for ice cream is rar thanaththesoce increase their total revenue by raising the price of ice cream b The price elasticity of demand stays the same at each oint alng a near emand e di if a 10 per cent increase in university I fees resuits in a S per cent retuction n me education demanded, then the demand for university education rice e If the price elasticity of the demand for bread s iess than a decase in the price the total revenue of the suppliers of bread Normal profit implies that a All factors employed are earning an amount equal to thee b Firms are earning enough to cover all the costs of producnen Price must be greater than average variable cost All of the above A finds that by producing and selling the ast unsit of ts roers he h marginal cost it incurs is R35 in order to masimise profits, the m shoue Decrease its Decrease its output if it a a monesolstic firm, but net ecessanily ta sa increase its output imespective of the type of Sm Decrease its output irrespective of the tye ofm t sExplanation / Answer
Ans14) the correct option is b) the demand for fresh cream will decrease and the demand for waffle will increase. Since the price of ice cream fell the people will start consuming more ice cream rather than fresh cream. Waffle is consumed with ice cream so demand for waffle will also increase
Ans15) the correct option is b) demand for screwdrivers has decreased. When demand decreases the demand curve shifts to the left and equilibrium price and quantity decrease.
Ans16) the correct option is inelastic demand. The overproduction has occurred due to the inelastic demand.
Ans17) the correct option is d). If the price elasticity of the demand for bread is less than one, a decrease in the price of bread will lower the total revenue of the suppliers of bread. The change in price will lead to a smaller change in quantity demanded.
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