Question

wherdemand is described as q - Note: An alternate notation for this equation is E(p)- f(p), in other words, quantity is a function of price. You may use whichever form of this equation for elasticity that you like the best, but I will use this notation in this assignment. f(p) Fill in the blank: 3. , the elasticity of demand is less than the relative change in price, and the a. If demand is called the elasticity of demand is greater than the relative change in price, and the demand is called the percentage changes in price and demand are relatively c. When equal, and the demand is said to have

Answer 1

3. Fill in the blank: a. If E(P)<1 demand is called inelastic demand b. IfE(P)> 1 demand is called elastic demand the elasticity of demand is less than the relative change in price, and the the elasticity of demand is greater than the relative change in price, and the c. When EP)-1 equal, and the demand is said to have unitary elastic_ , the percentage changes in price and demand are relatively

When % change in demand is less than the % change in price, then demand is inelastic and absolute value of elasticity is less than 1.

When % change in demand is more than the % change in price, then demand is elastic and absolute value of elasticity is more than 1.

When % change in demand is equal to the  % change in price, then demand is unitary elastic and absolute value of elasticity is equal to 1.