Exam 19: Demand and Supply Elasticity

Suppose that the number of units of good A consumed falls 12 percent when the price of good B falls 8 percent. The cross price elasticity of demand between goods A and B is

The price elasticity of demand measures

If the bus fare of a city increases from $1.00 to $1.10 per ride and as a result total revenue increases, then we know that

When demand is unit elastic, an increase in price will cause

-Refer to the above table. What is the absolute price elasticity of demand if a price falls from $7.50 to $7?

-In the above figure, along which range would total revenue rise by raising prices?

-In the above figure, along which range would total revenue remain unchanged by raising prices?

"The income elasticity of a good is positive if a consumer increases the total spending on that good as a result of an increase in its market price." Do you agree or disagree? Why?

Price elasticity of supply is always

When demand is elastic

If the demand curve for a product is horizontal, then

If a seller lowers the price of a product when demand is price inelastic, the seller can expect revenues to

The price elasticity of demand along a vertical demand curve is

-Use the above table. The income elasticity of artisan bread is

A demand relationship in which a given percentage change in price will result in a less than proportionate percentage change in quantity demanded is

The absolute price elasticity of demand for a vertical demand curve

What is the price elasticity of demand? How is the price elasticity of demand calculated?

If the absolute value of the price elasticity of demand for a product is less than 1, then

A demand relationship in which the quantity demanded changes exactly in proportion to the change in price is

If the price of a good increases and the total revenue also increases, the good has a(n)