Importance of elasticities of demand and supply, Public Economics

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QUESTION 1:

Assuming that you are a consultant on the ‘Light Rail' project and you are asked to forecast demand for this mode of transport. What are the forecasting techniques that you may consider to use?

QUESTION 2:

Explain the importance of a knowledge of elasticities of demand and supply for

a) a manufacturer of mobile phones
b) a stakeholder in the sugar industry or in the textile industry
c) the Minister of finance

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