Explain the concept of the price elasticity of demand and provide examples where understanding the nature of the price elasticity of demand has been important in the decision making of a firm.
Assessment item 1 Assignment 1: Short Answer Questions Value: 10% Length: Approximately 500 words Submission method options Alternative submission method Task Assignment 1 consists of two short answer questions (worth 5 marks each) based on Text material. Before attempting this assignment you are expected to have read Text chapters 1, 2, 3 and 4. Sources used in your answer should be fully referenced in APA 6th style. Answer the following questions ensuring that you apply economic principles or theory related to (a) the concepts of supply and demand for Question 1 and (b) the concepts of specialisation and exchange for Question 2 to inform your analysis and support your decisions. Communicate your ideas with correct grammar, spelling and writing style and support your answers with diagrams as necessary. Question 1 (5 marks) Explain the concept of the price elasticity of demand and provide examples where understanding the nature of the price elasticity of demand has been important in th...