Suppose the cross-price elasticity of demand for coffee and tea If the price of coffee falls by 95%, Calculate the percentage change in the quantity demanded of tea: Economics Assignment, NTU, Singapore

1. Suppose the cross-price elasticity of demand for coffee and tea. If the price of coffee falls by 95%,
   (a) Calculate the percentage change in the quantity demanded of tea
   (b) Explain the relationship between the two goods based on your calculation in part
2. (a). The following is the information of the cookies business by Fantasy cookie in Westgate Singapore. Table 1 Items Cost ($) Rental of shop space $4,500 per month Raw materials $10 per box of cookies sold Broadband with two office Phone line charges $300 per month Nets, QR and credit card terminal payment $40 per month Utilities $2.50 per hour Bakery equipment rental cost $2,000 per month Wages of each part-time staff $7 per hour wage rate Additional information:

• The business operates 7 days per week from Monday to Sunday for 28 days per month.
• The duration of the operation hours is 8 hours from Monday to Friday and 9 hours from Saturday to Sunday.
• There are two part-time workers employed on a per-day basis.
• On average, the shop sells 50 box cookies a day. Each box of cookies is $30. Based on the information in Table 1, calculate the following for the cookies business per month.

Show all your formula and workings in detail and give your answer correct to two decimal places.

• Total fixed cost
• Total variable cost
• Total cost
• Average fixed cost
• Average variable cost
• Average total cost
• Total revenue
• Total profit or loss