Elasticity of Demand
Economics ⇒ Consumer and Producer Behaviour
Elasticity of Demand starts at 11 and continues till grade 12.
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A firm increases the price of its product and finds that total revenue increases. What can you say about the price elasticity of demand for its product?
Define price elasticity of demand.
Describe the relationship between total revenue and price elasticity of demand.
Explain the concept of cross elasticity of demand with an example.
Explain the concept of perfectly inelastic demand with an example.
Explain the difference between elastic and inelastic demand.
Explain the importance of elasticity of demand for a producer.
A firm increases the price of its product and finds that total revenue increases. What can you say about the price elasticity of demand for its product?
If the cross elasticity of demand between two goods is negative, the goods are: (1) Substitutes (2) Complements (3) Inferior (4) Giffen goods
If the cross elasticity of demand between two goods is positive, the goods are: (1) Complements (2) Substitutes (3) Unrelated (4) Inferior
If the price elasticity of demand for a product is less than 1, the demand is said to be: (1) Elastic (2) Inelastic (3) Unitary elastic (4) Perfectly elastic
Income elasticity of demand for inferior goods is: (1) Positive (2) Negative (3) Zero (4) Infinite
Fill in the blank: If the demand for a good does not change with a change in its price, the demand is said to be ________.
Fill in the blank: If the price elasticity of demand is greater than 1, demand is said to be ________.
Fill in the blank: The demand for luxury goods is generally ________.
Fill in the blank: The price elasticity of demand for a necessity is generally ________.
State whether the following statement is true or false: 'The longer the time period, the more elastic the demand.'
True or False: If the demand for a good is perfectly inelastic, the demand curve is vertical.
True or False: If the price elasticity of demand is zero, quantity demanded does not change with price.
True or False: Necessities tend to have inelastic demand.
