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
__________ is a measure of the reponsiveness of demand to changes in income and involves demand curve shift .
Income elasticity of demand (YED)
Cross elasticity of demand( XED)
Price elasticity of demand (PED)
Unit elasticity of demand
The price elasticity of demand depends on :
the units used to measure price and the units used to measure quantity .
the units used to measure price but not the units used to measure quantity .
The units used to measure quantity but not the units used to measure price .
Neither the units used to measure price nor the units used to measure quantity .
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 .
All the above
Demand will be more elastic ,
The higher the income
The lower the price
The shorter the passage of time after a permanent price increase
The more substitutes available for the good
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
PED =
Percentage change in quantity demanded / Percentage change in Price
Percentage change in demanded / Percentage change in supply
Percentage quantity demanded / Percentage change in Price
Percentage change in quantity demanded / Percentage change in supply
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
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 it complements .
Its substitute but not its complements .
It complements but not its substitutes
Which of these measures the responsiveness of the quantity of one good demanded to an increase in the price of another goods .
Price elasticity
Income elasticity
Cross elasticity
Unit elasticity
