Demand is elastic if __________. percentage change in quantity is greater than p
ID: 1250588 • Letter: D
Question
Demand is elastic if __________.
percentage change in quantity is greater than percentage change in price
percentage change in price is greater than percentage change in quantity
percentage change in quantity demand is zero
percentage change in price is zero
percentage change in quantity is equal to percentage change in price
The most important determinant of the degree of elasticity of demand is __________.
whether the item is a big-ticket item
whether the item is a luxury
how many uses the product has
the availability of substitutes
Statement I. A perfectly elastic demand curve has an elasticity of zero. Statement II. When demand is elastic and price is raised, total revenue will fall.
Statement I is true, and statement II is false.
Statement II is true, and statement I is false.
Both statements are true.
Both statements are false.
Statement I. When demand is inelastic and price is lowered, total revenue will rise. Statement II. Demand is unit elastic when elasticity is one.
Statement I is true, and statement II is false.
Statement II is true, and statement I is false.
Both statements are true.
Both statements are false.
When demand is perfectly elastic, a tax increase is borne __________.
only by the buyer
only by the seller
mostly by the buyer
mostly by the seller
Explanation / Answer
1. "1. percentage change in quantity is greater than percentage change in price" 2. "4. the availability of substitutes" (all of these are correct, but #4 is probably the most important) 3. "2. Statement II is true, and statement I is false." 4. "2. Statement II is true, and statement I is false." 5. "2. only by the seller"
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