1. What is a competitive market? Briefly describe the types of markets other than perfectly competitive markets.
5. Popeye's income declines and as a result he buys more spinach. Is spinach an inferior or a normal good? What happens to Popeye demand curve for spinach?
3. If the elasticity is greater then 1, is demand elastic or inelastic? If the elasticity equals 0, is demand perfectly elastic or perfectly inelastic?
5. If demand is elastic, how will an increase in price change total revenue? Explain.
7. How is the price elasticity of supply calculated? Explain what this measures.
9. Is the price elasticity of supply usually larger in the short run or in the long run? Why?
The solution answers the question(s) below.