The demand curve in the figure above illustrates the demand for a product with:
Zero price elasticity of demand at all price .
Infinite price elasticity of demand
Unit price elasticity of demand at all prices
None of these
__________ are not necessary essential .
Necessities
Luxuries
Complementary
Giffen
A virtual demand curve has :
Unit elasticity
Infinite elasticity
Zero elasticity
Varying elasticity
If goods are complements , definitely their :
Cross elasticities are positive
Cross elasticities are negative
Income elasticities are negative
Income elasticities are positive
The demand curve in the figure above illustrates a product whose demand has a price elasticity of demand equal to
Zero at all prices
Infinity
Once at all prices
A different amount at different prices .
If demand is price elastic :
a 1 percent decrease in the price leads to increase in the quantity demanded that exceeds 1 percent .
a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent
The price is very sensitive so any shift the supply curve .
A 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent
__________ 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 elasticity of demand
Price elasticity of supply
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
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
According to the law of demand , there is ________ relationship between price and quantity demand .
Positive
Negative
Inverse
