1.) that would still be considered elastic? Assume that dem Assume that demand i
ID: 1159345 • Letter: 1
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1.) that would still be considered elastic? Assume that dem Assume that demand is elastic. Of the elasticities shown here, which is the lowest A. 10.0 B. 1.01 1.00 D. 0.01 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 A. price elastic. B. price inelastic. c. rebate inelastic. D. unit elastic. 13.) Total revenue will increase if price A. B. C. D. rises and demand is elastic. rises and demand is unit elastic. falls and demand is inelastic. falls and demand is elastic. Cross elasticity of demand measures the response in A. the quantity of one good demanded to a change in the price of another good. B. the income of consumers to the change in the price of goods. C. the price of a good to a change in the quantity of another good demanded. D. quantity of one good demanded when the quantity demanded of another good 14.) changes Which of these elasticities is the least elastic? A. 1 B. 10 C. 100 D. 0.9 15.) facing demand that is A. price inelastic. B. revenue inelastic. C. unit elastic. D. price elastic.Explanation / Answer
11. b.
Elasticity is the change in quantity demanded due to change in price. The PED is elastic if it is greater than 1. 1.01 is the smallest.
If PED is 1 than it is unit elastic. The percentage change in quantity demanded equals percentage change in price of the good. This is not the correct answer.
12.A. Price is elastic. A decrease in price would lead to higher sales, and thus, more revenue.
13. Demand is elastic if revenue increases if there is a fall in price.
14. A
Cross price elasticity is calculated by dividing the % change in quantity demanded of good A by the % change in price of good B.
15. D, since it is less than 1.
16.C. Unit elastic since the percentage change in quantity demanded is the same as price of the good.
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