ECONOMICS
ELASTICITY OF DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
-3, 0
|
|
|
-0, 6
|
|
|
+3, 0
|
|
|
+0, 6
|
Detailed explanation-1: -If a 2% price rise results in a 4% decrease in quantity demanded, then (c) demand is elastic, and its total revenue decreases. When a product experiences a drastic change in the demand with a minimal price change, the demand for the product is said to be elastic.
Detailed explanation-2: -Answer and Explanation: If the price elasticity of supply is 1.5, and a price increase led to a 1.8% increase in quantity supplied, the the price increase is 0.83%. .
Detailed explanation-3: -b. If the price elasticity of supply is 1.5, this means that a 1% rise in price causes an increase in quantity supplied of 1.5%.
Detailed explanation-4: -The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.