Topic: economics

Order Description answer the questions with numbers and some writing Question 2 The demand for Milk is described by the following relationship between price (P, measured in £s) and quantity (Q, measured in thousands of litres): P = 1200 – 5Q The supply of Milk is similarly represented by the following: P = 120 + 3Q a) if the Government grants a subsidy of £0.04 per litre to Milk producers, calculate the new equilibrium price and quantity. [3 marks] b) calculate the price elasticity of demand associate with the price change calculated in part (b) above. [4 marks] PS NO REFERENCE