Answer
elastic
====
Elasticity is a measure of the sensitiveness of quantity demanded because of a change in price in proportional or percentage terms.
The given elasticity is 2 so the demand is elastic as it is above 1 because the quantity change is higher than the price change in proportional or percentage term.
If the price elasticity of demand is equal to 2, the good has _demand.
Draw the demand curve for a good with a price elasticity of demand equal to 0. What can you say about substitutes available to the consumer for this good?
4. (a) A product has a price elasticity of demand equal to -2. If price increases by 6 percent, what will be the decrease in quantity demanded? (b) Is this product most likely a luxury or necessity, and why? (c) Another product has an income elasticity of 0.8. If income rises by 8 percent, what will be the increase in demand? (d) Two products have a cross price elasticity of -0.4. Are these product substitutes or complements. (e) Yet another...
16. If price elasticity of demand for good X is 2 and the price elasticity of supply for good X is 3; if an excise tax of $40 levied on good x, consumers will end up paying _______ and producers paying __________. $15; $25 $16; $24 $25; $15 $24; $16
Suppose the own price elasticity of demand for good X is -2, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is -6. Determine how much the consumption of this good will change if for the following: A) The price of good X decreases by 5 percent. B) The price of good Y increases by 10 percent. C) Advertising decreases by 2 percent. D) Income increases by 3...
A price elasticity of demand for Good X equal to -.85 implies Group a)if price increases by $1.00, quantity demanded will decrease by .85. b)if price decreases by $0.85, quantity demanded will increase by 1. c)a price of $1.00 will result in sales increase of .85 units. d)if price increases by 1%, quantity demanded will decrease by .85%. e)if price increases by 1%, demand will decrease by .85%.
1. A product has a price elasticity (of demand) equal to 1.50. If price increases by six percent, what will be the decrease in quantity demanded? 2. A product has an income elasticity of 0.75. If income rises by 8 percent, what will be the increase in demand? 3. In question 2, is the product most likely a luxury or necessity? Why? 4. The cross price elasticity between two products, L and M, is 0.40 (that is, the change in...
The price elasticity of demand for a good produced by a monopolist O A. equals zero as long as the good has no close substitutes. O B. does not equal zero because every good has at least one good substitute for it. C. is always inelastic since the demand curve slopes down. O D. does not equal zero because there will always be some substitutes, however imperfect they may be.
A product has a price elasticity (of demand) equal to -1.50. If price increases by 8 percent, what will be the decrease in quantity demanded? A product has an income elasticity of 0.8. If income rises by 6 percent, what will be the increase in demand? In question 2, is the product most likely a luxury or necessity? Why? The cross price elasticity between two products, L and M, is 0.60 (that is, the change in demand for L with...
All other things being equal, the __________ substitutes for a good, the __________ the price elasticity of demand.
The price elasticity of demand is equal to the percentage change in price divided by the percentage change in quantity demanded the change in quantity demanded divided by the change in price. the value of the slope of the demand curve. the percentage change in quantity demanded divided by the percentage change in price If 20 units are sold at a price of US$50 and 30 units are sold at a price of US$40, what is the absolute value of...