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Problem:
a. With the help of diagrams, describe how the price and quantity of potatoes will change under the different circumstances:
(i) A severe drought affecting its production (ii) Consumers expect a future rise in prices of potatoes; and (iii) A new production technique is adopted to increase efficiency.
b. Along the demand curve, price elasticity of demand is constant. Do you agree?
c. Describe the income and cross elasticity of demand.
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