Question: For each of the following changes, show the effect on the demand curve, and state what will happen to the market equilibrium price and quantity in the short run:
a. The price of substitute good rises.
b. Consumer incomes fall, and the good is normal.
c. Consumer incomes fall, and the good is inferior.
If a product's demand function is: Q=30-3p, then calculate the price elasticity of demand when:
a. Product price is $3 using the point elasticity formula.
b. Product price decreases from $4 to $3, using the are elasticity formula.