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  1. The price of the product A was reduced from Rs. 100 to Rs. 90 and, as a result, the quantity demanded has increased from 70 to 75 units. The demand is:
  2. inelastic;
  3. elastic;
  4. unit elastic;
  5. cannot be determined from the given information.

 

 

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Related questions

3. If price were increased from $25 to $26 and quantity demanded fell from 10 to 9, calculate elasticity; state whether demand is elastic, unit elastic, or inelastic; and find out how much total revenue was when price was $25 and $26.

4. If price lowered from $10 to $8 and quantity demanded rose from 50 to 51, calculate elasticity; state whether demand is elastic, unit elastic, or inelastic and find out how much total revenue was when the price was $10 and $8.

True/False
If the quantity demanded for a product increases from 100 to 150 units when
the price decreases from $14 to $10, the price elasticity of demand for this product,
using the midpoint formula, in this price range is 1.2


A product with a price elasticity of demand equal to 1.5 is described as price
inelastic.

Demand tends to be inelastic at higher prices and elastic at lower prices.

Multiple Choice
If price rises from $80 to $90 and quantity demanded falls from 250 to 200,
then
a. The demand is inelastic
b. Total receipts rise.
c. Elasticity is equal to 0.625.
d. Elasticity is greater than one.

When Detroit’s bus fare increased from 40 cents to 60 cents, the number of riders
decreased from 800 per week to 620 per week. Over the price range given, the demand
curve for bus service in Detroit is
a. Elastic
b. Unit elastic
c. Inelastic
d. Impossible to determine

Stan’s Discount Tires reduced the price on its Goodyear radial tires from $65
per tire to $55 per tire. The following month, sales of this tire increased from
320 units to 500 units. The coefficient of elasticity for this tire was
a. 1.0
b. 0.63
c. 3.65
d. 1.33

A 20 percent increase in Miss Sarlo’s income resulted in an increase in her
annual consumption of steak from 10 to 15 pounds. Miss Sarlo’s income elasticity
of demand for steak is
a. 0.25
b. 0.50
c. 2.0
d. 2.5

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.

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