A closer look at demand & supply

What is the definition of PED?

• a measure of how quantity demanded of a product changes when there is a change in the income of the consumer

• a measure of how quantity demanded of a product changes when there is a change in the price of the product

• a measure of how quantity supplied of a product changes when there is a change in the price of the product

• a measure of how demand of a product changes when there is a change in the price of the product

What is the formula for PES?

• percentage change in quantity supplied/percentage change in demand of the product

• change in quantity supplied/ change in price of the product

• percentage change in quantity demanded/percentage change in price of the product

• percentage change in quantity supplied/percentage change in price of the product

What is the range of values for inelastic supply?

• 0<PES<1

• 1<PES<∞

• PES = 1

What is the range of values for elastic supply?

• 0<PES<1

• PES = 1

• 1<PES<∞

Which of these are the determinants of PES?

• time period considered

• increase in costs vs increase in output

• expectations about future prices

• ability to stock store

• necessity of the product

The ____ the time period considered, the more elastic the supply will be.

If costs rise significantly, compared to the amount of output increased, the the supplier _____ be willing to increase supply.

Primary goods ...

• have a rather inelastic supply, in opposition to manufactured goods

• have a rather elastic, in opposition to manufactured goods

• have a rather elastic, similarly to manufactured goods

• have a rather inelastic, similarly to manufactured goods

Which of these are determinants of PED?

• number and closeness of substitutes

• necessity of the product

• how much costs rise as output is increased

• the ability to store stock

• time period considered

What is the range of values for elastic demand?

• PED = 1

• PED = 0

• 1<PED<∞

• 0<PED<1