Question

Assume that the demand for cosmetic or plastic surgery is price inelastic. Are the following statements true or false? Explain.

a) When the price of plastic surgery increases, the number of operations decreases.

b) The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded.

c) The marginal revenue of another operation is negative.

d) Changes in the price of plastic surgery do not affect the number of operations.

e) Quantity demanded is not very responsive to changes in price.

f) If more plastic surgery is performed, expenditures on plastic surgery will decrease.

Answer 1

A) true, as per law of demand, as P will rise, number of cosmetic surgery demanded will fall

B) False,

As for in-elastic demand, the percentage change in Quantity Demanded is less than percentage change in price

C) true, for in-elastic portion of demand Curve, MR Curve is negative

D) false,

As if Price changes, the number of operation will be changed

E) true,

For in-elastic demand, Quantity Demanded is not very responsive to change in Prices

F) true