1)For each of the following products, state whether you think the demand is elastic or inelastic, and your rationale.

a) Gasoline

b) Allergy medication

c) Chocolate bars

d) Cell Phones

e) Milk

Under what types of market structure would you classify the following industries? Please explain your rationale.

a) Canadian beer industry

b) Hot Dog Vendor Markets

c) Cable television industry (Oakville market)

d) Canadian airline industry

2)

• Calculating the price elasticity of supply

Eric is a retired teacher who lives in Saint John and provides math tutoring for extra cash. At a wage of $45 per hour, he is willing to tutor six hours per week. At $60 per hour, he is willing to tutor eight hours per week. Using the midpoint method, the elasticity of Eric's labor supply between wages of $45 and $60 per hour is _, which means that Eric's supply of labor over this wage range is _.

1)1. a) Gasoline: Inelastic in the short run, as a consumer, has no alternative or substitutes but in long run, it may become relatively elastic if there is an option for other substitutes for gasoline.

b) Allergy medication: Relatively inelastic, because people will buy irrespective of price changes

c) Chocolate bars: Relatively elastic, as there are various substitutes and it is luxury commodity, so if price rises change in quantity will more than price changed) Cell phones: It is inelastic among high-income group, whereas elastic for lower and middle-income group. The high-income group would buy irrespective of the price change but it is not the case with a lower-income group.

e) Milk: Inelastic, as milk is considered as a necessary commodity so if the price of it changes there would not be much change in its demand.

2. a) Canadian beer industry: Oligopoly market, as this market is shared by a small number of producers, so there is limited competition.

b) Hot dog vendor markets: Perfect competition, as there are numerous buyers and sellers, homogeneous products and the price is set by market forces.

c)Cable television industry: Monopoly, as there are no competitors in the market.

d) Canadian airline industry: Duopoly market, as there are few firms providing the same services. ...

2)please see the attached file for the complete solution.