Exam 5: Elasticity and Its Applications: The Elasticity of Demand

Figure 5-4 -Refer to Figure 5-4.If the price decreases in the region of the demand curve between points B and C,we can expect total revenue to

When quantity demanded responds strongly to changes in price,demand is said to be

Figure 5-10 -Refer to Figure 5-10.Total revenue when the price is P₂ is represented by the area(s)

Scenario 5-1 Suppose that when the average college student's income is $10,000 per year,the annual quantity demanded of Patty's Pizza is 50 and the annual quantity demanded of Sue's Subs is 80.Suppose that when the price of Patty's Pizza increases from $8 to $10 per pie,the quantity demanded of Sue's Subs increases from 80 to 100.Suppose also that when the average student's income increases to $12,000 per year,the annual quantity demanded of Patty's Pizza increases from 50 to 60. -Refer to Scenario 5-1.What can you deduce about the type of good Patty's Pizza is and about the relationship between Patty's Pizza and Sue's Subs?

Holding all other forces constant,if decreasing the price of a good leads to an increase in total revenue,then the demand for the good must be

Figure 5-12 -Refer to Figure 5-12.Which of the following price changes would result in no change in sellers' total revenue?

Figure 5-9 -Refer to Figure 5-9.Using the midpoint method,the price elasticity of demand between point A and point B is

Figure 5-9 -Refer to Figure 5-9.If the price rises from point D to point C,total revenue

Which of the following expressions can be used to compute the price elasticity of demand?

Figure 5-6 -Refer to Figure 5-6.For prices above $8,demand is price

Total revenue will be at its largest value on a linear demand curve at the

Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?

Which of the following should be held constant when calculating an income elasticity of demand?

Which of the following is likely to have the most price elastic demand?

Which of the following is likely to have the most price elastic demand?

A good will have a more elastic demand,the

A perfectly inelastic demand implies that buyers

If demand is price inelastic,then

Which of the following is likely to have the most price inelastic demand?

Figure 5-3 -Refer to Figure 5-3.Jenna says she would buy 10 gallons of gas per week regardless of the price.If this is true,then Jenna's demand for gas is represented by demand curve