Elastic, Inelastic And Unit Flashcards
(20 cards)
What is perfect price elasticity?
Perfect price elasticity occurs when the quantity demanded changes infinitely with any change in price.
What is the elasticity coefficient for perfectly elastic demand?
The elasticity coefficient for perfectly elastic demand is infinite.
True or False: In a perfectly inelastic demand scenario, the quantity demanded changes regardless of price changes.
False.
What is perfect price inelasticity?
Perfect price inelasticity occurs when the quantity demanded does not change at all with changes in price.
What is the elasticity coefficient for perfectly inelastic demand?
The elasticity coefficient for perfectly inelastic demand is zero.
Fill in the blank: In unitary elasticity, the percentage change in quantity demanded is __________ to the percentage change in price.
equal
What is the elasticity coefficient for unitary elastic demand?
The elasticity coefficient for unitary elastic demand is one.
True or False: Perfectly elastic demand curves are horizontal.
True.
True or False: Perfectly inelastic demand curves are vertical.
True.
What type of goods are typically associated with perfectly inelastic demand?
Necessities or life-saving drugs.
What type of goods are typically associated with perfectly elastic demand?
Commodities with perfect substitutes.
What is the main characteristic of a demand curve that is perfectly elastic?
It indicates that consumers will only buy at a specific price.
What happens to total revenue when price decreases for a product with elastic demand?
Total revenue increases.
What happens to total revenue when price decreases for a product with inelastic demand?
Total revenue decreases.
In which type of elasticity is the total revenue maximized?
Unitary elasticity.
Fill in the blank: The demand for luxury items is often considered __________.
elastic
What is the shape of a demand curve that is unitary elastic?
It is a rectangular hyperbola.
What does it mean if demand is elastic?
A small change in price leads to a large change in quantity demanded.
What does it mean if demand is inelastic?
A change in price leads to a smaller change in quantity demanded.
What is an example of a product with perfectly elastic demand?
A product that has many perfect substitutes, such as a specific brand of sugar.
