Question

1. What is the numerical value for the price elasticity of
demand if a price change causes no change in quantity
demanded?________ What is the numerical value for elasticity of
demand if a price change causes no change in total revenue?________
What is the elasticity of demand for a horizontal demand
curve?________ What is the elasticity of demand if a price increase
leads to an increase in total revenue? **elastic /
inelastic**. What is the numerical value for the elasticity
of demand if a 2% price decrease leads to a 7 % increase in
quantity demanded?________

Answer #1

What is the numerical value for the price elasticity of demand
if a price change causes no change in quantity demanded?

0

This means that demand is insensitive to price changes.

What is the numerical value for elasticity of demand if a price
change causes no change in total revenue?

1

It means that demand is unitary elastic.

What is the elasticity of demand for a horizontal demand
curve?

Infinity

What is the elasticity of demand if a price increase leads to an
increase in total revenue?

Inelastic

When the demand is inelastic, an increase in price leads to higher
total revenue and vice-versa.

What is the numerical value for the elasticity of demand if a 2%
price decrease leads to a 7 % increase in quantity demanded?

Elasticity of demand = 7/2 = 3.5

In each case below, what is the value of the price elasticity
of demand? Is demand perfectly inelastic, inelastic, unit elastic,
elastic or perfectly elastic?
Price falls by 10%, quantity demanded rises by 8%
Price rises by 3%, quantity demanded falls by 3%
Price rises by 1%, quantity demanded falls by 5%
Price rises by 5%, quantity demanded collapses to zero
Price falls by 2%, quantity demanded does not change

1. When elasticity of demand is equal to one and the change in
the quantity demanded and the change in price are exactly
proportional. This type of elasticity is described as ________.
A. elastic
B. inelastic
C. unitary elastic
2. What happens to total revenue (TR) if the price rises on a
product with demand that is price elastic?
A. Total revenue will rise.
B. Total revenue will remain the same.
C. Total revenue will fall.

Assume economists have determined that the price elasticity of
demand for housing in a given range of the demand curve is -1.75.
Suppose that the price of housing increases by 10 percent.
Given the value of price elasticity of demand, is
demand for housing elastic or inelastic in the given range of the
demand curve?
What happens to quantity demanded of housing (what is the
percentage change in the quantity demanded of housing) as
price of housing increases by 10%?...

1-The price elasticity of demand for furniture is estimated at
1.3. This value means a one percent increase in the
A.price of furniture will decrease the quantity of furniture
demanded by 1.3 percent.
B.price of furniture will increase the quantity of furniture
demanded by 1.3 percent.
C.quantity of furniture demanded will decrease the price of
furniture by 1.3 percent.
D.quantity of furniture demanded will increase the price of
furniture by 1.3 percent.
2.An advance in technology lowers the price of...

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

Fill in the blanks:
When demand is inelastic, a decrease in price causes
quantity demanded to ________and total revenue to ________.
If price rises and total revenue rises, demand must be
________.
When demand is elastic, an increase in price causes quantity
demanded to ________and total revenue to ________.
If price rises and total revenue stays the same, demand must be
________ elastic.

A price change causes the quantity demanded of a good to
increase by 20 percent, while the total revenue of that good
increases by 15 percent. Is the demand curve elastic or inelastic?
Explain.

A price change causes the quantity demanded for a good to
increase by 20 percent and the total revenue of that good decreases
by 15 percent. What can you say about the price elasticity of
demand at this point.
It's elastic
It's inelastic
It's unitary elastic
It's perfectly elastic

Taking the absolute value of the cross-price elasticity of
demand is incorrect because it would:
remove the ability to tell whether the two products have
inelastic demand or elastic demand.
cause the value of the cross-price elasticity of demand to
become smaller.
remove the ability to tell whether the two products are
substitutes or complements.
cause the value of the cross-price elasticity of demand to
become zero.
The percent change in insulin demanded for any price change is
zero. The...

1. If the price elasticity of demand for cigarettes is 0.55, and
the price of cigarettes increases by 10 percent, then the quantity
of cigarettes demanded will fall by what percent?
2. If the price elasticity of demand for chicken is 2, then a
20% decrease in the price of chicken will lead to what percentage
increase in the quantity demanded of chicken?
3. When the price of NBA tickets is $25 each, 30,000 tickets are
sold. After the price...

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