(Solved): a. What is Cross-prices Elasticity of Demand and how cross price elasticity of demand can be used t ...

a. What is Cross-prices Elasticity of Demand and how cross price elasticity of demand can be used to identify substitute and complementary products? Explain using examples. (10 marks) b. Name the five reasons why demand for a good or service might be inelastic. (5 marks) c. Sunil Bakery has decided to change the price of cakes to experiment which price will earn higher revenue. Total revenue that could be earn at each price level is shown in the below graph. According to the graph: i. What is the total revenue area for each price level? (2 marks) ii. Which price level will give higher revenue and what would be the reason? (8 marks)