Answer the following three questions and show your work, convert percentage to decimal. See attached sheet for Question set. show each step to answers.
Question 1: Elastic and Inelastic Demand
Which product above has the most price-elastic demand and would therefore show the greatest increase in quantity demanded if the price were lowered?
Question 2: Elastic and Inelastic Demand
For which product(s) is demand inelastic? List all of them.
Question 3: Calculating elasticity (do not refer to the list above to answer this question)
Corn is presently $4.00 per bushel. If we reduce the price by 2.5%, to $3.90 per bushel, we observe that the quantity demanded increases by 1.5%. What is the price elasticity of demand for corn? (Convert the percentages to decimals before computing to avoid confusion interpreting the answer, and express the answer as an absolute value, that is, as a positive number.)