If the demands are elastic, should firms increase or reduce the price of the goods? Why? What happen if the demands are in-elastic?
AssignmentECO101–MacroeconomicsWeek 4 – 31st Mar 2019The assignment is
worth 40% of the total unit weight.1. Students are required to cover all
stated requirements, penalty will apply for late submissions.2. Your
answer ONLY uploaded to Moodle in PDF file.3. You need to support your
answers with appropriateHarvard style references where necessary.4.
Copying each other’s work or plagiarizing of anykind will receive a ZERO
mark.5. Please save the document as: ECO101_Firstname_Surename_Student
Number Eg: ECO101_John_Smith_201800001
General Rules and Requirements:• This assignment is weighted to 40%• Font type should be Times New Roman (size 12), paragraph spacing should be equal to 1.5.• An electronic copy of the assignment must be submitted via Turn-it-inSimilarity rate must be lower than 20%, between 20%-40%, you will receive penalty on your report, higher than 40%, you will fail your report immediately.You are allowed to submit your report many times unit the due date (31st Mar 2019, 23 p.m. Sunday). You don’t need to delete previous report, you just need to resubmit it and the previous one will be replaced by the new one.If you submit your report after the due date, you will receive 10% penalty on each day late unit zero mark.No excuses including medical certificate will be accepted. If you need any help: firstname.lastname@example.orgGood luck!Please Answer The Following Four Discussion Questions (each worth 10 marks) 1. If the demands are elastic, should firms increase or reduce the price of the goods? Why? What happen if the demands are in-elastic?2. What are the key factors determining if the supply is elastic or in-elastic? Providing three factors and explain each of them with examples.3. What is the opportunity cost? Should individuals and nations specialise in producing goods or services for which they have comparative advantage or absolute advantage? Why?4. Does law of diminishing returns always hold at low production? Why? And why the returns will diminish eventually?