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 .
None of these
Cross elasticity of demand is :
Negative for complementary goods .
Negative for substitute goods
Unitary for inferior goods
Unitary for giffen goods
__________ are not necessary essential .
Necessities
Luxuries
Complementary
Giffen
According to the law of demand , there is ________ relationship between price and quantity demand .
Positive
Negative
Inverse
If goods are complements , definitely their :
Cross elasticities are positive
Cross elasticities are negative
Income elasticities are negative
Income elasticities are positive
__________ 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
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 reponsiveness of demand to changes in income and involves demand curve shift .
Income elasticity of demand (YED)
Cross elasticity of demand( XED)
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
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
