question
Demand is said to be ___________ when the quantity demanded is very responsive to changes in price.
answer
elastic
question
If the demand curve is perfectly elastic, then an increase in supply will:
answer
increase the quantity exchanged but result in no change in the price.
question
The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal:
answer
5 units
question
Demand is said to be _____________ when the quantity demanded is not very responsive to changes in price.
answer
inelastic
question
Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a 15 percent decrease in the number of haircuts purchased. What is the elasticity of demand facing Billy Bob's Barber Shop?
answer
3
question
Economist usually refer to elasticity of demand in absolute terms.
answer
True
question
Is Elasticity of Demand calculated by absolute changes or percentage changes?
answer
Percentage changes
question
If the price of good increases by 10% and the quantity demanded falls by 5% what is the elasticity of demand? Answer in absolute terms.
answer
0.5
question
Elasticity of demand is percentage change in quantity demanded divided by percentage change in price
answer
True
question
When a business wants to increase it's revenue should it raise it's price?
answer
It depends on the elasticity of demand.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
