- Explain the term Price Elasticity of Demand. When the price of a commodity rises from $10 to $20, the quantity demanded falls from 16 units to 14. Calculate the price elasticity of demand using the average price method.
- What are the principal determinants of the Price Elasticity of Demand? Provide an example in each case.
- Explain the Substitution and Real Income Effects of a price change. Provide an example from your own experience of grocery shopping.
Please provide citations.
