If a 10 cent drop in the price of a $10 pen resulted in an increase in the quantity of pens purchased from 100 to 110, and a 10 cent drop in the price of a $1 candy bar resulted in an increase in the quantity of candy bars from 100 to 110, the price elasticity of demand is:
|greater for the pen.|
|less for the pen.|
|the same for both the candy bar and the pen.|
If price elasticity of demand is _____________ than one, a decline in price ____________ total revenue.
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Pepsi and Coke tend to be substitute goods. As such, their cross-price elasticity of demand value is most likely positive.
4) ANswer: Same for both pen and candy
Due to change in price by 10% for both candy and pen there is increase in quantity by 10% thus the Price elasticity demand is same in both the cases.
9) When the Price elastic demand is greater tha one than the market is elastic which means that decline in price will lead to increase to total revenue.
Answer: greater, increases
10) Asnwer: True
The price elasticity of demand of on any good depends on the consumers. If they check that the product as substitute to another product which means that the market is elastic thus leading to positive impact.
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