ECONOMICS
ELASTICITY OF DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Consumers spend a high proportion of disposable income on the good.
|
|
|
The price of a complementary good has also increased.
|
|
|
The substitute goods are all very much more expensive.
|
|
|
The price of the good is taken to be an indication of the level of quality
|
Detailed explanation-1: -The quantity demanded is an amount per unit of time. For example, the amount per day or per month. Other things remaining the same, • If the price of good rises, the quantity demanded of that good decreases. If the price of a good falls, the quantity demanded of that good increases.
Detailed explanation-2: -Quantity Supplied Under Regular Market Conditions The supply curve is upward-sloping because producers are willing to supply more of a good at a higher price. The demand curve is downward-sloping because consumers demand less quantity of a good when the price increase.
Detailed explanation-3: -Two goods are substitutes if an increase in the price of one causes an increase in the demand for the other. Two goods are complements if an increase in the price of one causes a decrease in the demand for the other.
Detailed explanation-4: -An increase in demand, all other things unchanged, will cause the equilibrium price to rise; quantity supplied will increase. A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease.