Exam 5: Elasticities of Demand and Supply

The figure above shows the demand curve for Starbucks latte. -Refer to the figure above. Suppose Starbucks charges $3.50 per cup for its latte. Which of the following is true? I. At this price, the demand for Starbucks latte is inelastic. Ii. If Starbucks raises the price of its latte, its revenue will increase. Iii. If Starbucks lowers the price of its latte, it will increase its revenue.

Tacos and pizza are substitutes. If a 2 percent change in the price of a taco leads to a 4 percent change in the demand for pizza, the cross elasticity of demand equals

If a lower price for a Pepsi decreases the demand for a Coke, the cross elasticity value for Pepsi and Coke is

What is the price elasticity of supply? List and briefly define three cases of the price elasticity of supply.

If a decrease in price increases total revenue, what can you determine about the elasticity of demand for the good?

Pete feeds his dog 100 percent more Pup-Peronis when Zuke's treats increase in price by 50 percent. For Pete, Pup-Peronis and Zuke's are ________ and the cross-price elasticity of demand is ________.

How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?

When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?

The income elasticity of demand is

"The price elasticity of demand is a measure of how sensitive demanders are to changes in the price of a product." Is this statement true or false?

If the price of a good rises, then moving along a demand curve the percentage change in the quantity demanded will be

The demand for necessities generally is ________ the demand for luxury goods.

When the price of going to a movie rises 5 percent, the quantity of DVDs demanded increases 10 percent. The cross elasticity of demand equals

If the quantity supplied and the price change by the same percentage, then supply is

If the supply curve is ________, the elasticity of supply is ________.

What effect does a price hike have on the total revenue of the producers?

Which of the following does NOT influence the price elasticity of demand?

The figure above shows the supply curve for roses. -Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units. Using the midpoint method, the elasticity of demand equals

If the price of a movie rises 3 percent and, as a result, the quantity demanded of video rentals increases 6 percent, then the cross elasticity of demand is

If the price elasticity of demand for razors is 0.32, the demand for razors is