Unit elastic demand :
Means that the ratio of change in the quantity demanded to a change in the price equals 1
Means that the ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1
Will be vertical
Will be horizontal
Complementary goods have :
The same elasticities of demand
Very low price elasticities of demand
Negative cross price elasticities of demand with respect to each others .
None of these
__________ is a measure of the responsiveness of demand for one good to a change in the price of another good and involves demand curve shifts .
Cross price elasticity of demand (XED)
Price elasticity of demand (PED)
Unit elesticity of demand
Price elasticity of supply
Demand is perfectly inelastic when:
Shift is the supply curve results in no change in price .
The good in question has perfect substitutes.
Shift of the supply curve results in no change in quantity demanded .
The price elasticity of demand is defined as the absolute value of the ratio of :
Price over quantity demanded
Change in price over change in quantity demanded
Percentage change in quantity demanded over the percentage change in Price
Change in price over change in quantity supply
When a change in price results in an infinitely large response in quantity demanded ,demand is
Unit elastic
Perfectly inelastic
Perfectly elastic
Elastic
__________ are not necessary essential .
Necessities
Luxuries
Complementary
Giffen goods
The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of
Its substitute and its complements .
Its substitute but not its complements .
It complements but not its substitutes
If goods are complements , definitely their :
Cross elasticities are positive
Cross elasticities are negative
Income elasticities are negative
Price elasticities are negative
A virtual demand curve has :
Unit elasticity
Infinite elasticity
Zero elasticity
Varying elasticity
