Elasticities

It is observed that when the price of pizzas is $16 per pizza, 100 pizzas are sold; when the price falls to $12 per pizza, 120 pizzas are sold. Calculate price elasticity of demand. 4 A 10% increase in the price of a particular good gives rise to an 8% decrease in quantity bought. What is the price elasticity of demand?

A 10% increase in the price of a particular good gives rise to an 8% decrease in quantity bought. What is the price elasticity of demand?

Calculate PED between (a) points a and b, where price increases from $10 to $15.

Calculate PED between points c and d, where price increases from $25 to $30.

Calculate PED between points e and f, where price increases from $40 to $45.

A 15% increase in income leads to a 10% increase in demand for good A and 20% increase in demand for good B. Which of the two goods is income elastic?

• Good A

• Good B

A 15% increase in income leads to a 10% increase in demand for good A and 20% increase in demand for good B. Which of the two goods is likely to be a necessity product?

• Good A

• Good B

Suppose that in response to an increase in the price of good X from $10 to $15 per unit, the quantity of good X produced does not respond at all during the first week. What is its PES?

Suppose that in response to an increase in the price of good X from $10 to $15 per unit, the quantity of good X produced increases from 10 000 units to 12 000 units over five months. What is its PES?

Suppose that in response to an increase in the price of good X from $10 to $15 per unit, the quantity of good X produced increases from 10 000 to 18 000 units over two years. What is its PES?