INFORMATION AND COMMUNICATIONS UNIVERSITY

SCHOOL OF ENGINEERING

AGRICULTURAL ECONOMICS AND MARKETING

An assignment submitted in partial fulfilment of the requirements

for the Bachelor of Science Degree in Agriculture with Education.

ASSIGNMENT TWO

Student details

NAME: SIFUNISO LIKEZO

SIN: 1504318521

PHONE: +260974105692

EMAIL: likesifuniso@gmail.com

YEAR: Three (Second Semester)

1. The law of demand states that, quantity purchased varies inversely with price. The
higher the price, the lower the quantity demanded.
2.

Price of tomatoes Quantity of tomatoes

a 5 90
b 10 80
c 15 70
d 20 60
e 25 50
f 30 40
g 35 30

DEMAND CURVE FOR TOMATOES

40

35

30

25

20

15

10

0
30 40 50 60 70 80 90

Demand curve

3. Elasticity of price = (Q1 - Q0 )/ (Q1 + Q0)

(P1 – P0) / (P1 + P0)
(15-20) / (15 + 20)
(8-5) / (8 + 5)
- 5 / 35 = - 0.142857
3 / 13 0.230769
= - 0. 619, Price elasticity
 ii. The price is Inelastic
iii. This is because the percentage change in quantity demanded is less than the
percentage change in price.
4. Testes, Societies Income, and Expectations
5. Substitute goods are goods which, as a result of changed conditions, may replace each
other in use. Conversely, the demand factor for a good is decreased when the price of
another good is decreased. For example, if the price of peanut butter is reduced, people
will substitute butter to peanut butter.