S\' 1500 1350 1200 5 1050 900 e 750 600 450 300 150 Quantity (units per month) Q
ID: 1117238 • Letter: S
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S' 1500 1350 1200 5 1050 900 e 750 600 450 300 150 Quantity (units per month) Question 19: The figure above depicts the market for espresso makers in Seattle, WA. If the price of coffee beans (a complement good for consumers) falls, a possible new equilibrium price and quantity of espresso makers could be C 1) P $600; Q- 160 2) P $900; Q 90 3) P = $300: Q = 30 4) P = $ 1050; Q = 30 Question 20: If the price of vintage vanderstorfin videographs increases by 5% and the quantity demanded decreases by 2%, then in that price range, the demand for vintage vanderstorfin videographs is relatively elastic 2) relatively inelastic O 3) perfectly inelastic 4) perfectly elastic Question 21: Ceteris paribus, if the price of a good rises and as a result the total amount that consumers spend on the good rises, then demand for the good must be O relatively elastic C 2) relatively inelastic C 3) unit elastic C 4) perfectly elasticExplanation / Answer
19) from above graph equlibirium price =$ 900 and equilibirium quantity = 60.
20) price elasticity of demand =
% change in quantity /% change in price
= .02/.05 = 0.4
It means demand is relatively inelastic because % change in quantity demanded is less than % change in price.
So the correct option is 2.
21) if the price of a good rises and the total expenditure also rises then price elasticty of demand is less than 1 by expenditure method. It means demand for good is relatively inelastic.
So, the correct option is 2
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