Question

14 If the slope of the demand curve is –2, price is $5 and quantity demanded is 10 units, then the price elasticity of demand is:

Answer #1

Price elasticity of demand = Percentage change in Quantity/Percentage change in Price = (Change in Quantity/Quantity)/(Change in Price/Price)

For a linear demand function, Q = a-bP, -b is the slope, which is the ratio of fall in quantity to the rise in price, or (change in quantity/change in price) or .

As a result we can write,

Price elasticity of Demand = -b (p/Q) = (slope of demand curve)x(Price/Quantity)

On Substituting values given in the question, we have:

Price elasticity of demand = -2x5/10= -1.

1.Price elasticity of demand is defined as:
Multiple Choice
a.the slope of the demand curve.
b.the slope of the demand curve divided by the price.
c.the percentage change in price divided by the percentage
change in quantity demanded.
d.the percentage change in quantity demanded divided by the
percentage change in price.
2. The Midpoint Method for Elasticity uses which of the
following?
Multiple Choice
a.Average percentage change in price only
b.Average percentage change in quantity only
c.Average percentage change in...

A perfectly inelastic demand curve indicates that
a.
price has no effect on the quantity demanded.
b.
for a given percent change in price, the quantity demanded rises
by the same percentage.
c.
the percent change in price is less than the percent change in
quantity demanded.
d.
a producer can sell as many units as desired at the market price
but no units above the market price.

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 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...

If the demand curve for a good shifts leftward
A-quantity demanded is less at each price
B-quantity demanded remains constant at each price
C-quantity demanded is greater at each price
D-demand is greater at each price

1.) Suppose if the price of a good is $12, the quantity demanded
is 50 units; when the price is $10, the quantity demanded is 100
units. Use the midpoint approach to compute the price elasticity of
demand. Is demand at this point relatively responsive or relatively
unresponsive to price changes?
2.) For this exercise you will need to first build a graph to
these specifications: Draw a downward sloping demand curve with
vertical intercept (0,4) and horizontal intercept (8,0)....

Consider the market demand curve for apples, which relates the
quantity demanded of apples (in
thousands of bushels) to various prices of apples. Suppose
that the price elasticity of demand for apples is -2.
If the price of apples increases by 3 percent, then by how
much will the quantity demanded of apples
decrease?
Select one:
a. by 2 percent
b. by 6 percent
c. by 6 thousand bushels
d. by 2 thousand bushels

The demand curve for peanuts is downward-sloping. At
a price of $2 / pound, the quantity demanded of peanuts is 100
pounds. If the price of peanuts rises to $4 / pound,
consumer surplus will: Group of answer choices Decrease by exactly
$200. Decrease by less than $200. Decrease by exactly $100.
Decrease by more than $200.

The following data below represent the demand schedule for good
X.
Price ($)
Quantity Demanded
22
32
18
48
14
64
10
80
8
96
Use the midpoint formula to determine the price elasticity of
demand at the following price points:
$22 and $18

The price elasticity of demand measures:
Select one:
a. the percentage change in quantity demanded of a good in
response to a one percentage change in
income
b. none of the above
c. the change in the number of units demanded of a good in
response to a one percentage change in
its price
d. the percentage change in quantity demanded of a good in
response to a one dollar change in its
price

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