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the price elasticity of demand coefficient measures |
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buyer responsiveness to price changes. |
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the basic formula for the price elasticity of demand coefficient is: |
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percentage change in quantity demanded/percentage change in price. |
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if the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will: |
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increase the quantity demanded by about 25 percent. |
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which of the following is not characteristic of the demand for a commodity that is elastic? |
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the elasticity coefficient is less than one. |
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if the demand for product x is inelastic, a 4 percent increase in the price of x will: |
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decrease the quantity of x demanded by less than 4 percent |
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a perfectly inelastic demand schedule: |
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can be represented by a line parallel to the vertical axis. |
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the price elasticity of demand of a straight-line demand curve is: |
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elastic in high-price ranges and inelastic on low-price ranges. |
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a leftward shift in the supply curve of product x will increase equilibrium price to a greater extent the: |
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more inelastic the demand for the product. |
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the price elasticity of demand is: |
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negative, but the minus sign is ignored. |
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the price elasticity of demand for beef is about 0.60. other things
equal, this means that a 20 percent increase in the price of beef will
cause the quantity of beef demanded to: |
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decrease by approximately 12 percent. |
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if a demand for a product is elastic, the value of the price elasticity coefficient is: |
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greater than one. |
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if the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then: |
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demand is elastic. |
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if the price elasticity of demand for gasoline is 0.20: |
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a 10 percent rise in the price of gasoline will decrease the amount purchased by 2 percent. |
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moving upward on a downward-sloping straight-line demand curve, we find that price elasticity: |
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increases continuously. |
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in which price range of the accompanying demand schedule is demand elastic? |
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$4-$3 |
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when the percentage change in price is greater than the resulting percentage change in quantity demanded: |
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an increase in price will increase total revenue. |
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in which of the following instances will total revenue decline? |
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price rises and demand is elastic |
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in which of the following instances will total revenue decline? |
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price rises and demand is elastic |
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if a price reduction reduces a firm's total revenue: |
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the demand for the product is inelastic in this price range. |
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the demands for such products as salt, bread, and electricity tend to be: |
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Realitivly Inelastic
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The price elasticity of supply measures how:
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responsive the quantity supplied of x is to changes in the price of x. |
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the main determinant of elasticity of supply is the: |
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amount of time the producer has to adjust inputs in response to a price change. |
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suppose the supply of product x is perfectly inelastic. if there is an
increase in the demand for this product, equilibrium price: |
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will increase but equilibrium quantity will be unchanged |
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the supply of known monet paintings is: |
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perfectly inelastic. |
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if the income elasticity of demand for lard is
3.00, this means that: |
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lard is an inferior good. |
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the formula for cross elasticity of demand is percentage change in: |
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quantity demanded of x/percentage change in price of y. |
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the larger the positive cross elasticity coefficient of demand between products x and y, the: |
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greater their substitutability. |
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we would expect the cross elasticity of demand between dress shirts and ties to be: |
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negative, indicating complementary goods. |
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is the difference between the maximum prices consumers are willing to pay for a product and the lower equilibrium price. |
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consumer surplus: |
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refer to the above diagram. if actual production and consumption occur at q3:
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an efficiency loss (or deadweight loss) of e + f occurs. |
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