QUESTION 2 [30 Marks](a) Using supply and demand analysis, explain the effect on the equilibrium price andquantity traded of houses in a country following the events below. (Consider eachevent separately.)(i)A fall in the rate of interest on loans for house purchases for an extendedperiod of time.(ii)A rise in the level of taxes to be paid on the sale of a house.[5 marks][5 marks](iii)The relaxation of planning controls allowing more land to be used forbuilding new houses.[5 marks](b) Assume the demand for cricket match tickets at Rs50 is 50,000 per week in India.If the Cricket club raises its prices to Rs60 per ticket and subsequently the demandfalls to 45,000 per week. Calculate the value of Price elasticity of demand.[5 marks](c) The table below provides data on weekly total revenue and total cost for a firm in $:Output per weekTotal RevenueTotal Cost(units)15010280251004511157012510061301407132200(i) What is the Marginal Revenue from the production of the 5th unit?[2 marks](ii)What is the Total Fixed Cost when 5 units of output are produced?[1 mark](iii) Calculate the Average Variable Cost of producing 5 units of output?[2 marks]Page 4 of 6(iv) Explain why, typically, the long run Average Cost curve is U-shaped.[5 marks]

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