Question

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by...

Suppose that when the price of water rises by 30 percent, the quantity demanded falls by 10 percent. The price elasticity of demand for water is ____________, making water an _______________ good (in this example).

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans) Price elasticity of demand is the responsiveness of quantity demanded to change in price. If price elasticity is negative, good is normal good. PED is positive for veblen and giffens good, as they defy law of demand.

Further, if PED is less than 1, good is inelastic. If PED is 1, good is unit elastic and if PED is more than 1, good is elastic.

PED = % change in quantity demanded ÷ %change in price

PED = (-10%)/(30%) = -0.33

Therefore, water has PED of -0.33 ,making water inelastic good.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When the price is $2, quantity demanded is 10. When the price rises to $8, quantity...
When the price is $2, quantity demanded is 10. When the price rises to $8, quantity demanded falls to 2. What is the value of the elasticity of demand? Is it elastic or inelastic?
A measure of the rate of percentage change of quantity demanded with respect to price, holding...
A measure of the rate of percentage change of quantity demanded with respect to price, holding all other determinants of demand constant is a. Income elasticity of demand b. Own price elasticity of demand c. Price elasticity of market equilibrium d. Cross price elasticity of demand The value of the income elasticity of demand coefficient for Good X is  given as 0.1. This means that a. as income increases by 10 percent, quantity demanded rises by 1 percent. b. as income...
8. When the price increases by 30 percent and the quantity demanded drops by 30 percent,...
8. When the price increases by 30 percent and the quantity demanded drops by 30 percent, the price elasticity of demand is unitary elastic. elastic. perfectly inelastic. inelastic. perfectly inelastic. 9. If the cross-price elasticity of demand between Good A and Good B is 2 and the percentage change in price of Good A is 5 percent, what is the percentage change in quantity demanded of Good B? -3 percent 1.50 percent 10 percent 3 percent -1.25 percent
Suppose that when the price of good A rises from $18 to $20, the quantity demanded...
Suppose that when the price of good A rises from $18 to $20, the quantity demanded of good B falls from 30 units to 20 units. Using the midpoint method, the cross-price elasticity of demand is Select one: a. -0.26, where goods A and B are complements. b. -0.26, where goods A and B are substitutes. c. -3.8, where goods A and B are complements. d. -3.8, where goods A and B are substitutes.
When the price of doodads falls from $16 to $10 the quantity of doodads demanded rises...
When the price of doodads falls from $16 to $10 the quantity of doodads demanded rises from 150 to 160 units. a) Compute and categorize the elasticity of demand of doodads. b) Interpret the number you calculated in part (a) for the elasticity of demand for doodads. c) If the government placed an excise tax on doodads, who would pay the majority of that tax: consumers or firms? Explain verbally (no graph required).
When the price of a cruise rises from $19,500 to $20,500​, the quantity demanded decreases from...
When the price of a cruise rises from $19,500 to $20,500​, the quantity demanded decreases from 2,100 to 1,900 travelers. Use this information to calculate the price elasticity of demand. The percentage change in the price of a cruise is——？ The percentage change in the quantity of cruises demanded is ——？percent. ​>>> Report your answer as a positive number. The price elasticity of demand for cruises is——?
If, as the price of good Y rises from $5.00 to $5.75, the quantity demanded of...
If, as the price of good Y rises from $5.00 to $5.75, the quantity demanded of good Y falls from 54 units to 48 units, price elasticity of demand for good Y in this price range is Question 7 options: a) 0.84. b) 0.37. c) 1.05. d) 4.77. e) 1.19.
1) If quantity demanded for sneakers falls by 2.4 percent when price increases 17.2 percent, we...
1) If quantity demanded for sneakers falls by 2.4 percent when price increases 17.2 percent, we know that the absolute value of the own price elasticity of sneakers is: _______
The quantity of aggregate goods and services demanded rises when the a. price level rises, because...
The quantity of aggregate goods and services demanded rises when the a. price level rises, because the interest rate falls. b. price level falls, because the interest rate falls. c. price level falls, because the interest rate rises. d. price level rises, because the interest rate rises.
1.If price rises by 20% and quantity demanded of rice falls by 100 pounds, the elasticity...
1.If price rises by 20% and quantity demanded of rice falls by 100 pounds, the elasticity of demand is : (1 point) a. greater than 1 b. equal to -5 c. equal to -20 d. cannot be determined without additional information. 2.If quantity supplied responds only slightly to a change in price, then: (1 point) a. Supply is elastic b. An increase in price will shift the supply curve to a large extent c. Supply is inelastic d. Supply is...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT