Question

What is price elasticity of demand? What determines whether a product’s demand is elastic, inelastic, unitary elastic, perfectly elastic and perfectly inelastic? What is mid-point formula to determine the elasticity of demand and why is it important to use it instead of the general formula for elasticity? Carefully explain.

Answer #1

Price elasticity of demand- it refers to responsiveness of percentage change in demand due to responsiveness of percentage change in price

Elasticity depends on how much change in demand takes due to percentage change in price.

Perfectly elastic demand- it represents little percentage change in price bring infinite change in demand.

Perfectly inelastic demand- it represents percentage change in price brings no change in demand.

Unit elastic - it represents same percentage change in demand due to percentage change in price.

Relatively elastic- in this percentage change in demand is more than percentage change in price.

Relatively inelastic - it represents percentage change in demand is less than percentage change in price.

Mid point elasticity formula

= Q2-Q1 ÷Q1+Q2 /2 ×100 × P1+P2/2 ÷ P2-P1×100

Carefully explain (using diagrams) why is the point of
intersection between supply and demand for a product point of
equilibrium price and quantity and no other point. What happens if
price is above or below the point of equilibrium and how is the
equilibrium price and quantity restored?
What is price elasticity of demand?
What determines whether a product’s demand is elastic, inelastic,
unitary elastic, perfectly elastic and perfectly inelastic? What is
mid-point formula to determine the elasticity of demand...

Over time, the price elasticity of supply for sunglasses will
become more:
a. inelastic.
b. unitary elastic.
c. unchanged.
d. elastic.
e. perfectly elastic.
If the price elasticity of supply is 2.5, we know that it
is:
a. perfectly elastic.
b. perfectly inelastic.
c. unitary elastic.
d. relatively inelastic.
e. relatively elastic.

What did you learn about economics from these modules?(modules
is about Elasticity,Inelastic, Elastic, and Unitary Demand,
Calculate price elasticity using the midpoint method)

a. Calculate price elasticity given the following information.
Is the curve elastic, inelastic or unitary elastic? Original
Quantity:9800 lbs of coffee New Quantity: 6500 lbs of coffee
Original Price: $10.99/lb New Price: $9.99/lb b. (6 pts) Given the
elasticity calculated in part a, will the seller increase or
decrease their revenue if they increase the price of coffee? c. (8
pts) Explain the determinants of elasticity.

3.Factors that affect a product’s price elasticity of demand
are
A. availability of close substitutes.
B. passage of time.
C. necessity versus luxury.
D. definition of the market.
E. All of the above are correct.
4. If a price increase causes a decrease in total revenues
(total expenditures), then the product is considered to be
A. price elastic.
B. price inelastic.
C. unitary elastic.
D. All of the above are correct.
E.None of the above are correct.
5.Price elasticity of...

What is your elasticity of demand for going to this school? Is
it elastic, inelastic, or unit elastic? Explain your
reason. If tuition rose 10%, what would you do?
What is your elasticity of demand for gasoline? is it elastic,
inelastic, or unit elastic? explain your reason. If gas prices rose
10%, what would you do?
What is your elasticity of demand for movies?, is it elastic,
inelastic or unit elastic? Explain your reason. if movie ticket
prices rose 10%,...

A product’s price has increased by 25% but demand has not been
affected. It can be concluded that this product has:
Slightly inelastic demand
Elastic demand
Unitary elasticity
Inelastic demand
5 points
QUESTION 2
Premium pricing strategies are best for products with a ______
price and ______ quality:
lower; higher
higher; lower
lower; lower
higher; higher

Categories of Price Elasticity of Demand
For each of the following values for price elasticity of demand,
indicate whether demand is elastic, inelastic, perfectly elastic,
perfectly inelastic, or unit elastic. Also, indicate (increase,
decrease, no effect) what would happen to total revenue if a firm
raised the price in each elasticity range.
Price Elasticity of Demand
equals
Descriptionn of Elasticity
Total Revenue Change
-2.5
-1.0
-0.8
-infinity
0

For each of the following situations state whether the good is
elastic, inelastic, unitary elastic, perfectly inelastic, or unable
to determine and state which one of the elasticity
rules (not generalizations) you used to make your
determination.
When the price of Reese Peanut Butter Cups falls by 30% Stacey
increases her Reese buying by 30%.
Connor decreased the price of soda at his convenience store
causing the quantity of soda sold to rise giving him 10% more in
revenue.
When...

Is the price elasticity of demand for a rare luxury car elastic,
or inelastic?

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