1. When the price of SuperSparkle Toothpaste increases by 5%, the quantity demanded for SuperSparkle Toothpaste decreases by 20%. Calculate the price elasticity of demand for SuperSparkle toothpaste. Do consumers have an elastic or inelastic response to this price change. Why? Explain your reasoning.
2. Why does demand curve shift (left/decrease or right/increase) when consumer preferences change (decrease or increase)? What is the assumption being made about consumer preferences as a single D line is drawn? Explain your reasoning.