Chapter 18 Flashcards
(26 cards)
An elasticity of 2 would be considered
Elastic
A demand curve that is perfectly horizontal is
Perfectly elastic
If demand is elastic and the price is raised
Quantity demanded will fall and total revenue will rise
The advertiser wants to push her product’s demand curve
To the right and make less elastic
The curve(showing a flat horizontal line) in the above graph
Is a perfectly elastic demand curve
If a 1%change in the price leads to a .5% change in quantity demanded, then elasticity of demand is
.5
If demand is inelastic and price is lowered, total revenue will
Fall
Demand is elastic and price is lowered, total revenue will
Fall
Demand is elastic when
Percentage change in quantity is greater then percentage change in price.
In the graph(a\b\c\d\ along a straight line) unit elasticity occurs at about point
C
The lowest elasticity in the (a\b\c\d\e) graph would be a point
E
In elasticity of .75 means that a 1% change in the price will lead to a —–% change in the quantity demanded.
.75
If price falls from $100 to $99 and quantity demanded rises fro 2 to 3, the demand is
Very elastic
If a car dealership decides to offer a rebate to reduce the selling price of its cars and as a result finds an increase in its total revenues, then the demand for cars from this dealership is
Price elastic
Which is true? Graph showing d1 crossing at middle with D2
D2 is more elastic than D1
In general, the more the substitutes available for a good
The more elastic the demand for the good
Total revenue will increase if price
Falls and demand is elastic
Which of these elasticities is the least elastic?
1
Cross elasticity of demand measure the response in
The quality of one good demanded to a change in the price of another good.
A perfectly inelastic demand curve is
A vertical line
If consumers are price sensitive, then
They will have elastic demand curves
An elasticity of 1.5 means that 1% change in price will lead to a —–% change in quantity demanded.
1.5
If more substitutes become available demand tends to become ——- elastic and over time demand tends to become —— elastic
More and more
Income elasticity of demand measures how
The consumption of various goods and services respond to change in income.
