(a) The above diagram shows the demand curve (DD) and the supply curve (SS) for a perfectly competitive industry. Discuss the relationship that occurs with P if D1Q1 switches to D2Q2. (10 marks)
(b) Describe the price elasticity of supply and price elasticity of demand, as well as the differences that exist between them. (10 marks)
(20 marks, 2015 Q6)
A.
Ref:
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