PED and PES Quiz

Define PED [2]

Please draw a diagram of elastic PED [4]

Will the PED be more elastic or inelastic when there is a large number of substitutes? [1]

• A. Elastic

• B. Inelastic

• C. I don't know

Will PED be more elastic or inelastic when it takes a small % of their income as expenditure on the good? [1]

• A. Elastic

• B. Inelastic

• C. I don't know

How can a firm increase total revenue when PED is elastic? [2]

Define PES [2]

Please draw a diagram of relatively inelastic PES [4]

Please draw a diagram of relatively elastic PES [4]

Will the PES be more elastic or inelastic when a firm has large stock/inventory (库存)? [1]

• A. Elastic

• B. Inelastic

• C. I don't know

Will the PES be more elastic or inelastic when the productivity of firm decreases? [1]

• A. Elastic

• B. Inelastic

• C. I don't know