Question 1: Calculate Elasticity in the following cases:
a) Assume that a business firm sells a product at the price of Rs 500. The firm has decided to reduce the price of the product to Rs 400. Consequently, the demand for the product is raised from 20,000 units to 25,000 units. Calculate the price elasticity of demand.
b) Suppose the monthly income of an individual increases from Rs 15,000 to Rs 20,000. Now, his demand for clothes increases from 35 units to 40 units. Calculate the income elasticity of demand.
c) Assume that the quantity demanded for detergent cakes has increased from 400 units to 500 units with an increase in the price of detergent powder from Rs20 to Rs 25. Calculate the cross elasticity of demand between two products.
Question 2: Complete the table:
Out Units 
Total Cost 
Average Total Cost 
Fixed Cost 
Average Fixed Cost 
Average Variable Cost 
Marinal Cost 
0 
100 





25 
150 





50 
200 





75 
250 





100 
300 





125 
350 





150 
400 





175 
450 





200 
500 




