. When the percentage change in quantity demanded is larger than the percentage

Question

. When the percentage change in quantity demanded is larger than the percentage change in price, demand is said to be:
A) price inelastic.
B) unit price elastic.
C) price elastic.
D) perfectly inelastic.

38. If the price elasticity of demand is found to be -3/4, then demand is:
A) price inelastic.
B) price elastic.
C) unit price elastic.
D) positively sloped.


39. If the price elasticity of demand is found to be -6, then demand is:
A) price inelastic.
B) price elastic.
C) unit price elastic.
D) horizontal.

40. If the price of a good is increased by 15 percent and the quantity demanded falls by 20 percent, the price elasticity of demand is:
A) price elastic.
B) price inelastic.
C) unit price elastic.
D) normal.

41. If the absolute value of price elasticity is greater than 1, this means the demand curve in that region is:
A) price elastic.
B) price inelastic.
C) unit price elastic.
D) upward sloping

Explanation / Answer

When the percentage change in quantity demanded is larger than the percentage change in price, demand is said to be: %changeQ/%changeP=Elasticity Elasticity>1 (absolute value) is elastic. C) price elastic. 38. If the price elasticity of demand is found to be -3/4, then demand is: Absolute value of Elasticity1, so price elastic A) price elastic. 41. If the absolute value of price elasticity is greater than 1, this means the demand curve in that region is: A) price elastic.

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