1. If a 3 percent increase in price leads to a 5 percent increase in quantity supplied, then
a. Supply is unit elastic
b. Demand is inelastic.
c. Demand is elastic.
d. Supply is elastic.
e. Supply is inelastic.
2. Moving along a demand curve, the quantity demanded decreases 8 percent when price increases 10 percent.
The price elasticity of demand is calculated to be ________.
Given the price elasticity of demand calculated in part a, demand is ________ (elastic, inelastic or unitary elastic) along this portion of the demand curve.
3. Fill in the blanks:
When demand is elastic, the _______ effect dominates the _______ effect.
When demand is inelastic, the _______ effect dominates the _______ effect.
4. Use the following coordinates to answer the following questions.
(2400, $0), (1800, $3), (1000, $7), and (0, $12)
a. Find the arc price elasticity of demand over the price range from $3 to $7. Interpret the value of price elasticity.
1. If a 3 percent increase in price leads to a 5 percent increase in quantity supplied, then
a. Supply is unit elastic
b. Demand is inelastic.
c. Demand is elastic.
d. Supply is elastic.
e. Supply is inelastic.
2. Moving along a demand curve, the quantity demanded decreases 8 percent when price increases 10 percent.
The price elasticity of demand is calculated to be ________.
Given the price elasticity of demand calculated in part a, demand is ________ (elastic, inelastic or unitary elastic) along this portion of the demand curve.
3. Fill in the blanks:
When demand is elastic, the _______ effect dominates the _______ effect.
When demand is inelastic, the _______ effect dominates the _______ effect.
4. Use the following coordinates to answer the following questions.
(2400, $0), (1800, $3), (1000, $7), and (0, $12)
a. Find the arc price elasticity of demand over the price range from $3 to $7. Interpret the value of price elasticity.
Related textbook solutions
Related questions
Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.
| Price (P) | Quantity Demanded (Q) | Total Revenue | Marginal Revenue | Price elasticity of demandĀ |
| $5.00 | 0 | Ā | Ā | Ā |
| 4.50 | 1 | Ā | Ā | Ā |
| 4.00 | 2 | Ā | Ā | Ā |
| 3.50 | 3 | Ā | Ā | Ā |
| 3.00 | 4 | Ā | Ā | Ā |
| 2.50 | 5 | Ā | Ā | Ā |
| 2.00 | 6 | Ā | Ā | Ā |
| 1.50 | 7 | Ā | Ā | Ā |
| 1.00 | 8 | Ā | Ā | Ā |
| 0.50 | 9 | Ā | Ā | Ā |
| 0 | 10 | Ā | Ā | Ā |
