ECON101 Study Guide - Quiz Guide: Demand Curve, Pizza Hut

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turquoisegnu128

23 Oct 2018

School

University of Alberta

Department

Economics

Course

ECON101

Professor

all

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ECON101 Full Course Notes

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Document Summary

Identify the choice that best completes the statement or answers the question. Demand is said to be ____ when the quantity demanded is not very responsive to changes in price. independent inelastic. 2. a. b: unit elastic d. elastic the shorter the period of time consumers have to adjust to price changes. the longer the period of time consumers have to adjust to price changes. Price elasticity of demand is said to be greater: 3. a. b: when there are fewer available substitutes, when the elasticity of supply is greater. The shoe emporium reduces the price of its shoes by 50 percent and finds that the quantity demanded. The demand for shoes from the shoe emporium appears to be: a. b: unit elastic, unit inelastic. inelastic. elastic. When the blue ocean surfboard company lowered the price of surfboards by 20 percent, it sold 10. The price elasticity coefficient for surfboards is: 1/2, 1, 2, 20.

Related Questions

27. Which of the following statements is correct? a. The greater the price elasticity of demand, the more likely the product is a necessity. b. The greater the price elasticity of demand, the smaller the responsiveness of quanti demanded to price. The greater the price elasticity of demand, the greater the percentage change in price over the percentage change in quantity demanded. d. The greater the price elasticity of demand, the greater the responsiveness of quantity demanded to price.

Discussion #1

The law of demand states that a fall in the price of a good raises the quantity demanded, and the increase in price leads to a decrease in quantity demanded. The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price, and the percentage change in quantity demanded is greater than the percentage change in price. Demand is said to be inelastic if the quantity demanded responds only slightly to changes in the price, which indicates that the percentage in price is greater than the percentage in quantity demanded.

However, the extent of responsiveness of quantity demanded to a change in price depends on the nature of a particular good or service in the market. The price elasticity of demand partly depends on the availability of close substitutes. When a large number of substitutes are available, consumers respond to a higher price of a good by buying more of the substitute goods and less of the relatively more expensive good. In addition, goods or services that are considered necessities tend to have less elastic (more inelastic) demand, whereas goods or services that are considered luxuries have more elastic (less inelastic) demands.

Explain why the demand for the good or service provided by the organization you work for is elastic or inelastic. How does this influence pricing decisions?
Provide examples on how the availability of close substitutes affects price elasticity of demand.
Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.

Please answer ALL bulletins and place the answers under the correct bulletin.

The price elasticity of demand measures the responsiveness of the change in:

a. Quantity demanded to a change in price.

b. Price to a change in quantity demanded.

c. The slope of the demand curve to a change in price.

d. The slope of the demand curve to a change in quantity demanded.