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Demand for this good is (enter inelastic, elastic or unitary elastic) with respect to price.

This is a (enter normal or inferior) good as income elasticity is (enter less than, greater than or equal) zero, and it is a (enter necessity or luxury) good as income elasticity is (enter less than, greater than or equal) one.

Widgets and gadgets are (enter complements or substitutes), because cross-price elasticity is (enter positive or negative). Widgets and gadgets (enter are or are not) good substitutes because cross-price elasticity is (enter less than, greater than or equal) (enter the numerical value).

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Prachi Dabas
Prachi DabasLv10
29 Sep 2019

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Related questions

A good with an income elasticity greater than one is A good with an income elasticity that is positive and less than 1 is A good with an income elasticity that is negative is OA. a normal good that is income inelastic; a normal good that is income elastic; an inferior good OB. an inferior good; a normal good that is income elastic; a normal good that is income inelastic OC. a normal good that is income elastic, a normal good that is income inelastic; an inferior good OD. a normal good that is unit elastic, a normal good that is income elastic; an inferior good An example of an income elastic good is and an example of an income inelastic good is OA. a haircut; food OB. tobacco; furniture OC. clothing; a telephone OD. airline travel; an automobile

The demand curve for a product is given by QXd = 1,200 - 3PX - 0.1PZ where Pz = $300. a. What is the own price elasticity of demand when Px = $140? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price below $140? Instruction: Enter your response rounded to two decimal places. Own price elasticity: Demand is: If the firm prices below $140, revenue will: b. What is the own price elasticity of demand when Px = $240? Is demand elastic or inelastic at this price? What would happen to the firm’s revenue if it decided to charge a price above $240? Instruction: Enter your response rounded to one decimal place. Own price elasticity: Demand is: If the firm prices above $240, revenue will: c. What is the cross-price elasticity of demand between good X and good Z when Px = $140? Are goods X and Z substitutes or complements? Instruction: Enter your response rounded to two decimal places. Cross-price elasticity: Goods X and Z are:

For each of the following goods, state whether it is a normal good, a luxury, a necessity, or an inferior good. Explain your answers.

d. Cosmetics.

A) Normal and luxury. As income increases people purchase more cosmetics than before. The elasticity of cosmetics is positive and less than 1.

B) Normal and necessity. As income increases people purchase slightly more cosmetics than before. However, since everyone uses cosmetics, the elasticity is positive and greater than 1.

C) Normal and necessity. As income increases people purchase fewer cosmetics than before. When people have higher incomes they do not have to think about how they look, so they buy fewer cosmetics.

D) Normal and luxury. As income increases people purchase more cosmetics than before. The elasticity of cosmetics is positive and likely greater than 1.

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