ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Question 9A fall in the price of X from RM12 to RM8 causes an increase in the quantity of Y demanded from 900 to 1, 100 units.What is the cross elasticity of demand between X and Y?
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-2
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0.50
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-0.50
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2
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Explanation:
Detailed explanation-1: -The correct answer is b. In this question, when the price changes from 8 to 12, the quantity demanded changes from 110 to 90.
Detailed explanation-2: -2. Suppose that a 2% increase in price results in a 6% decrease in quantity demanded. Own-price elasticity of demand is equal to: a) 1/3.
Detailed explanation-3: -The price elasticity of demand(Ed) is 1.32, as the value of Ed is greater/more than 1 it implies that demand is elastic.
Detailed explanation-4: -Answer and Explanation: The correct answer is c. The income elasticity is 0.4 and the good is a normal good. The good is a normal good because demand rises as income rises.
There is 1 question to complete.