Q2. A) When price of indomie noodles was lowered from N 50, to N 40 per unit,
quantity demanded increases from 400 to 600 units per week. Calculate the
coefficient of price elasticity of demand and determine whether by lowering price
this firm has made a wise decision?
B) With the aid of appropriate diagrams discuss the effects of changes in supply on
a demand curve and explain the major factors that bring about such a change in the
market. Using this diagram justify for the reason why we purchase goods at lower
prices during the harvesting period of farm products.