ECON101 Lecture Notes - Lecture 6: Demand Curve, Negative Number

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salmonwasp417

13 Jul 2018

School

University of Alberta

Department

Economics

Course

ECON101

Professor

Gordon Lee

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Document Summary

Price elasticity of demand measures the responsiveness of quantity demanded to a change in the price. The size of the elasticity of demand is in uenced by: number of substitutes for the product - the more substitutes good a has, the more consumers can respond to a change in the price of good a. Q when price goes up, quantity goes down when increases price - will it increase revenue? depends on how much the price is increased and how much of demand there is for the product.

Related Questions

1. The concept of price elasticity of demand measures:

a. the slope of the demand curve.

b. the number of buyers in a market.

c. the extent to which the demand curve shifts as the result of a price decline.

d. the sensitiveness of quantities demanded to price changes.

2. When the percentage change in price is less than the resulting percentage change in quantity demanded:

a. demand is elastic.

b. demand is inelastic.

c. demand is unit elastic.

d. none of the above.

3. The elasticity of demand:

a. will be the same at each price-quantity combination on a stable demand curve.

b. tends to be elastic in high-price ranges and inelastic in low-price ranges.

c. tends to be inelastic in high-price ranges and elastic in low-price ranges.

d. is infinitely large for a perfectly inelastic demand curve.

4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.

5. Total revenue rises as the price of a good increases if price elasticity of demand is:

a. unitary elastic

b. perfectly inelastic.

6. The demand for such products as salt, bread, and electricity tend to be:

a. relatively price elastic.

b. relatively price inelastic.

c. of unit price elasticity.

d. perfectly price elastic.